Thursday Macro & Markets Update – 02.22.24
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Thursday Macro & Markets Update – 02.22.24

Markets turned green late on Wednesday, buoyed by a wave of dip-buying that lifted stocks out of a two-day slump. Meanwhile, investors geared for the all-important Nvidia (NVDA) earnings report while digging into the details of the minutes from the Fed’s January meeting. The S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) made small gains. Meanwhile, the technology benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) pared most of their previous daily losses, though still remained in the red.

Eyes on the Federal Reserve

The minutes from the Federal Reserve’s latest policy meeting offered no new insights beyond the statements policymakers have made over the past several weeks. Fed officials said in their January meeting that they need more evidence of decreasing inflation  towards the central bank’s target before they deem cutting rates appropriate. Policymakers remained “highly attentive” to the risks of resurgent inflation, while acknowledging that the economic outlook was “uncertain.” Market reaction to the minutes was muted as the hotter-than-anticipated January inflation numbers had already pushed traders to reign in their rate-cut expectations.

Nvidia Drives the Market

In contrast, Nvidia’s quarterly results, provided after-hours, brought a pleasant surprise by surpassing even the highest expectations. In its report, the chip designer said it increased full-year 2023 revenue by 126%, with EPS surging by 586%. The guidance for the current quarter envisions continued strong growth and further margin expansion. Furthermore, NVDA’s CEO, Jensen Huang, stated that AI has reached a “tipping point,” with demand surging worldwide “across companies, industries, and nations.” According to Huang, the groundbreaking technology has started a new investment cycle, offering enormous investment opportunities.

As an undisputed leader in AI chips, Nvidia serves as a bellwether for the AI sector and the broader tech-led market. Following the report, U.S. stock futures turned sharply higher on the news. Semiconductor stock forecasts were especially lifted by Nvidia’s outstanding results, as anticipation grows for a strong reversal from recent dips.


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