(New York) Western stock markets showed two faces on Thursday, between the soaring processor giant Nvidia, which pulled the technology sector, and macroeconomic uncertainties that weighed on the rest of the market.
In Europe, the gloom weighed on investor sentiment: Paris fell 0.3% to its lowest closing level since late March. London lost 0.7% and Milan 0.4%.
Frankfurt dropped 0.3%, as Germany entered a technical recession in the first quarter of 2023, with a second consecutive drop in its gross domestic product (-0.3%).
Chancellor Olaf Scholz assured the press that “the prospects for the German economy (were) very good”, the country being “overcoming the challenges” it faces.
On Wall Street, the Dow Jones fell 0.1%, the NASDAQ index gained 1.7% and the broader S&P 500 index rose 0.9%.
The graphics card specialist Nvidia presented, on Wednesday after the stock market, sales prospects boosted by the race for artificial intelligence.
Nvidia could be “the big winner of the AI craze, as its chips are well suited to training AI algorithms” which require a lot of data, said Ipek Ozkardeskaya, an analyst at Swissquote Bank.
The rest of the news was gloomy, about a week before a possible US default, which caused the rating agency Fitch to place the US AAA rating on “watch”.
“Almost a week of negotiations has gone by and still no visibility on a close outcome,” notes Andrea Tuéni, an analyst at Saxo Bank.
The American indicators of the day also confirmed the strength of the American economy, far from the slowdown expected by the American central bank (Fed).
US growth was revised upwards for the first quarter, to 1.3% on an annual basis against 1.1% initially announced, and weekly jobless claims came out below economists’ projections.
“Inflationary pressures remain, forcing central banks to consider possible further rate hikes,” said Angelo Kourkafas of Edward Jones.
This context has caused bond yields to rise sharply for several weeks. On Thursday, the yield on 2-year US government bonds stood at 4.53%, the highest for two and a half months, against 4.37% the previous day at the close.
This high rate environment is bad for equities as it reduces lending and weighs on the economy.
Chip jump behind Nvidia
The Santa Clara group gained 24.4% and more than $180 billion in market valuation in Thursday’s session alone.
Driven by the Nvidia surge, many of the major players in AI, in particular so-called generative artificial intelligence, have been sought after on Wall Street.
Semiconductor manufacturers AMD (+11.2%), Broadcaom (7.3%) or TSMC (+12%), Taiwanese, but listed on Wall Street, as well as Microsoft (+3.9%) and Alphabet (+2.2%), thus pranced.
In Europe, ASML gained 5% and Soitec 7.7%.
Lufthansa: ITA missa is
The Italian state and Lufthansa (+0.3% in Frankfurt) sealed an agreement on Thursday on the entry of the German airline giant into the capital of the public company ITA Airways born from the ashes of Alitalia.
On the side of currencies and commodities
Oil prices fell sharply on Thursday, depressed by the statements of the Russian Deputy Prime Minister in charge of Energy, who ruled out a new drop in production at the end of the next meeting of the OPEC+ alliance (Organization of oil exporters and its allies), in early June.
The price of a barrel of Brent North Sea oil for July delivery fell 2.7%, to close at US$76.26.
As for the barrel of American West Texas Intermediate (WTI) of the same maturity, it lost 3.4%, to US$71.83.
The dollar gained 0.23% against the euro, to 1.0725 dollars for one euro.
Bitcoin was up 0.4% at US$26,491.