Please see below article received from Brooks Macdonald this morning, which provides a global market update following Nvidia’s earnings announcement.
What has happened
The market saw a surge of optimism, largely fuelled by Nvidia’s robust earnings report. This positive sentiment propelled the S&P 500, Nasdaq 100, and Dow Jones indices to record new all-time highs. The S&P 500 soared by 2.11%, marking its most significant single-day advance in over a year, with the IT sector leading the charge, gaining 4.35%. Additionally, the lower-than-expected weekly jobless claims in the US bolstered confidence in the economy’s resilience. As a result, the expectations for rate cuts by the Federal Reserve in 2024 dipped to a three-month low of ~80 basis points, less than half of the peak levels observed in mid-January.
Nvidia’s post earnings rally
Nvidia’s stock had a remarkable day, climbing 16.40% after its earnings announcement. This surge augmented Nvidia’s market capitalization by an unprecedented $277 billion, eclipsing the previous record for the largest single-session market cap gain held by Meta, which earlier this month saw a $197 billion increase. This leap propelled Nvidia to the fourth position among the world’s largest companies by market capitalization and to third place within the S&P 500. Nvidia’s year-to-date returns stand at an impressive 58.59%, outperforming all other S&P 500 constituents.
What does Brooks Macdonald think
During a week devoid of major economic data releases, the spotlight has been on Nvidia’s earnings announcement. There were reservations about possibly overstating the significance of Nvidia’s earnings. Nonetheless, the strong market response has confirmed the initial hype, demonstrating the substantial impact that the financial performance of a single company can have on broader market trends.
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Chloe
23/02/2024