Wall Street traded in mixed fashion on Wednesday with the Nasdaq 100 rising by 0.51% following Nvidia's (NASDAQ:NVDA) impressive earnings report, while the S&P 500 also saw a modest rise of 0.20%, whereas Dow futures experienced a slight dip of 0.10%. Nvidia's stock price jumped by 6% due to its better-than-expected first-quarter earnings and revenue, driven by high demand for AI chips. Additionally, the company unveiled plans for a 10-for-1 stock split. These shifts coincided with the release of the latest Federal Open Market Committee (FOMC) meeting minutes, revealing growing concerns among policymakers regarding the persistent inflationary pressures in the US economy, signalling a readiness to tighten monetary policy further if necessary.
European stocks weakened on Wednesday as investors assessed the most recent UK inflation figures. The primary STOXX 600 Index declined by 0.34% to reach 521 points, with France's CAC 40 sliding by 0.61% to 8 092.11 and Germany's DAX dipping by 0.25% to 18 680.20. Data released by the Office for National Statistics revealed that consumer price inflation in the UK eased to 2.30% in April from 3.20% in the previous month, marking its lowest level since July 2021 and approaching closer to the Bank of England’s 2% target. Nonetheless, it surpassed the anticipated rate of 2.10%. Paul Dales, chief UK economist at Capital Economics, said: “The smaller-than-expected fall in CPI inflation makes a June rate cut by the BoE unlikely and casts some doubt over August too.”
On Wednesday, the Shanghai Composite edged up by 0.10% to approximately 3 160, whereas the Shenzhen Component declined by 0.20% to 9 665, reflecting mixed trading conditions. Mainland stocks faced uncertainty as there were few significant cues to guide market direction. Despite recent initiatives from Beijing aimed at bolstering China's struggling property sector, they did not succeed in maintaining a sustained market upturn. Additionally, investors remained vigilant regarding the potential for further policy relaxation in China, especially after the central bank decided to keep key lending rates unchanged this month, indicating a dual focus on supporting economic growth while safeguarding the currency. Japan’s Nikkei declined by 0.80% due to a weak yen supporting exports but also boosting imported inflation and impacting business outlook.
The FTSE/JSE All Share Index slipped by 0.40% to close at 79 492.57 points on Wednesday, staying near its peak last seen in February 2023 as global investors avoided making large bets ahead of the highly anticipated US Federal Reserve meeting minutes and US Nvidia's earnings. In economic news, Statistics South Africa reported that South Africa’s annual inflation rate eased for the second time to a four-month low of 5.20% in April 2024, down from 5.30% in March and slightly below market forecasts of 5.30%. The core inflation rate eased for the second month to 4.60% in April. On a monthly basis, the CPI rose by 0.30%, following a 0.80% increase in the prior month. At 18h00, the rand had weakened by 0.99% to R18.24/$, 0.80% to R19.77/€, and 0.93% to R23.24/£.
Brent crude futures declined, nearing the $81 per barrel mark, marking the fourth consecutive session of losses. This drop followed the release of the latest FOMC meeting minutes, which suggested that members are open to further tightening of policy if inflation rises, a development that could potentially dampen energy demand in the world's leading oil-consuming nation. Elsewhere, Trading Economic reported that: “Russia said on Wednesday that it exceeded its OPEC+ production quota in April for “technical reasons'' and will propose a plan to compensate for the error. All eyes now turn to the upcoming OPEC+ meeting scheduled for 1 June 2024, where key oil producers are anticipated to prolong output cuts to prevent a global oversupply and bolster prices.”
Spot gold stabilised at $2 415.32/oz at 20h30 with US gold futures decreasing by 0.30% to $2 419.00/oz according to BusinessDay.
