Global markets faced mixed outcomes on Wednesday, as investors weighed positive earnings from Nvidia against rising geopolitical tensions. The S&P 500 ended flat, while the Dow posted modest gains, boosted by optimism around AI growth. However, retail giant Target’s earnings miss sparked a broader pullback in consumer stocks, and rising tensions between Russia and Ukraine added to market nerves. With Nvidia’s earnings exceeding expectations and showcasing strong AI-driven demand but Investors have concerns about economic stability continue to loom large.

Key Takeaways:

  • S&P 500 Ends Flat While Dow Gains on Nvidia Optimism: The S&P 500 closed little changed at 5,917.11 as investors weighed positive earnings from Nvidia against rising geopolitical tensions between Russia and Ukraine. The Dow Jones Industrial Average gained 139.53 points, or 0.32%, to settle at 43,408.47. Optimism around Nvidia’s earnings helped lift the index, even as geopolitical tensions continued to weigh on market sentiment. Nvidia’s strong AI-driven results were seen as a potential catalyst for further market gains.
  • Nasdaq Dips as Tech Stocks Struggle: The Nasdaq Composite lost 0.11% to close at 18,966.14. While Nvidia’s strong earnings provided some support, broader weakness in the technology sector led to a slight decline. Concerns over geopolitical tensions and disappointing retail earnings added pressure on tech stocks.
  • Nvidia Surpasses Earnings Expectations, Fuels Optimism: Nvidia reported third-quarter revenue of $35.08 billion, surpassing expectations of $33.16 billion, while earnings per share came in at 81 cents adjusted, ahead of the expected 75 cents. The company also projected revenue of $37.5 billion for the current quarter, signalling a 70% year-over-year growth rate, albeit a slowdown from the 265% growth seen in the same quarter last year. Nvidia’s data centre division continued to be a key growth driver, with $30.8 billion in revenue, up 112% year-over-year, as demand for AI processors remained robust.
  • European Markets End Lower Amid Geopolitical Tensions: European markets ended mixed on Wednesday, with the pan-European Stoxx 600 index closing 0.01% lower as traders monitored the ongoing Ukraine-Russia conflict. The FTSE 100 fell by 13.95 points, or 0.17%, to 8,085.07 after higher-than-expected UK inflation data for October, which came in at 2.3%. The CAC 40 also traded slightly lower, while the German DAX index declined 0.29%, extending recent losses. The best performer on the Stoxx 600 was Sage Group, which rose 18% after reporting a 21% increase in full-year operating profit.
  • Asia-Pacific Markets Struggle Amid China and Japan Data: Asia-Pacific markets were mostly lower on Wednesday, with Japan’s Nikkei 225 falling 0.16% to 38,352.34 and the Topix down 0.43% to 2,698.29. In contrast, the Hang Seng Index rose 0.24%, while the CSI 300 gained 0.22% to 3,985.77. Japan’s export growth for October came in at 3.1% year-on-year, exceeding forecasts, while import growth stood at 0.4%, down from September’s 2.1%. China kept its benchmark lending rates unchanged, while South Korea’s Kospi rose 0.42% to 2,482.29. Australia’s S&P/ASX 200 slipped 0.57%, ending at 8,326.3.
  • Treasury Yields Rise Amid Geopolitical Concerns: U.S. Treasury yields moved higher as investors assessed the escalating geopolitical risks and the latest economic data. The 10-year Treasury yield rose by 4 basis points to 4.418%, while the 2-year yield climbed nearly 5 basis points to 4.321%. Rising tensions between Russia and Ukraine, coupled with the U.S. embassy’s closure in Kyiv, added to investor concerns, leading to heightened volatility in the bond markets.
  • Oil Prices Slip Despite Ukraine-Russia Tensions: Brent crude futures for January delivery settled down 50 cents, or 0.68%, at $72.81 per barrel, while West Texas Intermediate (WTI) crude futures for December dropped 52 cents, or 0.75%, to $68.87. The January WTI contract also fell 49 cents to $68.75. Despite concerns over the intensifying conflict between Russia and Ukraine, oil prices were pressured by an unexpected rise in US crude and gasoline inventories, as well as Norway’s Equinor restoring full output capacity at the Johan Sverdrup oilfield.
  • Bitcoin Reaches Record High: Bitcoin surged to a fresh record high just shy of $95,000, hitting an all-time peak of $94,982.37. The rise came after news that Donald Trump’s social media company was in talks to acquire crypto trading firm Bakkt, sparking optimism about a crypto-friendly regulatory environment under his administration. Bitcoin has more than doubled in value this year and soared over 40% since the November 5th U.S. presidential election.

FX Today:

  • EUR/USD Plummets Amid Geopolitical Uncertainty: EUR/USD closed at 1.0544, remaining in a consolidation phase as the pair struggled to clear the 50-period Simple Moving Average (SMA) at 1.0593. Additional resistance at the 100-period SMA at 1.0712 and the 200-period SMA at 1.0795 weighed on any bullish attempts. The pair’s inability to regain ground above the 50-period SMA highlights the overall bearish sentiment. Should sellers regain control, immediate support at 1.0500 could come under pressure, with a break below accelerating declines toward 1.0450. On the upside, a sustained move above 1.0593 could spark a short-term recovery, though significant obstacles remain at the 100 and 200-period SMAs.
  • GBP/USD Fails to Break Resistance, Bearish Sentiment Prevails: GBP/USD closed at 1.2651, unable to overcome resistance at the 50-period SMA at 1.2723. Further resistance levels at the 100-period SMA at 1.2838 and the 200-period SMA at 1.2933 emphasise the uphill battle for buyers. Sellers continue to exert pressure, pushing the price lower after repeated failures to clear these moving averages. Immediate support lies at 1.2600, with a break below this level likely leading to further downside, targeting 1.2550. For a shift to a more bullish tone, a close above 1.2723 is needed; however, even with such a recovery, the 100 and 200-period SMAs would present formidable resistance.
  • USD/JPY Bulls Hold Control Amid Strong Momentum: USD/JPY closed at 155.39, continuing its bullish trend after finding support above the 50-period SMA at 154.71. The pair is comfortably trading above the 100-period SMA at 153.81 and the 200-period SMA at 151.97, indicating strong upward momentum. Resistance at 155.50 is now being tested, with the next major hurdle at 156.00. If the bullish momentum persists, a break above 156.00 could open the door to further gains, potentially targeting 157.00. On the downside, a pullback below 154.71 would indicate waning momentum, with deeper support at the 100-period SMA acting as a key floor.
  • Gold Faces Rejection at Key Resistance Levels: Gold closed at $2,649.03, showing a slight pullback after an earlier attempt to breach the 50-period SMA at $2,608.01 and 100-period SMA at $2,671.51. The rejection from these key levels reinforces the bearish outlook, with the price failing to establish a sustained move above the moving averages. The 200-period SMA at $2,678.10 remains a significant hurdle, underscoring the resistance-heavy environment. If gold continues to face selling pressure, support is likely to reemerge near $2,630 and later the $2,600 level. Conversely, a recovery above the 100-period SMA at $2,671.51 would signal renewed bullish momentum, though additional resistance at the 200-period SMA could limit upside potential.

Market Movers:

  • Williams-Sonoma Soars on Strong Earnings: Williams-Sonoma surged 27.5% after beating expectations for both earnings and revenue in the third quarter. The home goods retailer reported earnings of $1.96 per share on $1.80 billion in revenue, surpassing analysts’ expectations of $1.78 per share and $1.79 billion in revenue. The company also raised its full-year guidance, boosting investor confidence.
  • Target Plunges on Earnings Miss: Target shares dropped 21.4% after missing third-quarter earnings expectations and slashing its full-year guidance, just three months after raising the forecast. Target’s disappointing performance was attributed to soft discretionary spending and increased cost pressures, leading to a sharp sell-off in its stock.
  • Ford Motor Slides on Workforce Reduction Announcement: Ford Motor fell 2.9% after announcing plans to cut 14% of its European workforce. The automaker cited significant losses driven by weak demand for electric vehicles and a lack of government support for the shift toward electric vehicles. The cuts are expected to affect around 3,800 employees, as Ford aims to improve its financial performance in a competitive EV market.
  • Qualcomm Drops on Long-Term Revenue Goals: Qualcomm shares declined 6.3% despite announcing new five-year financial targets, aiming to generate an additional $22 billion in annual revenue by 2029. The semiconductor company also outlined plans to generate $4 billion in revenue from industrial chips and $2 billion from chips used in virtual and augmented reality headsets, but the market response remained muted.
  • Super Micro Computer Declines Amid Volatility: Shares of Super Micro Computer fell 8.7%, partially reversing Tuesday’s gains of more than 31%. The server maker’s stock had surged earlier in the week after announcing the hiring of BDO as its new auditor and submitting a compliance plan to Nasdaq. However, profit-taking led to a pullback in the stock price.
  • Snowflake Soars on Earnings Beat: Snowflake shares rose 18% after the cloud company reported third-quarter adjusted earnings of 20 cents per share on $942 million in revenue, surpassing analysts’ predictions of 15 cents per share and $897 million in revenue. The strong performance and upbeat guidance for the upcoming quarter boosted investor sentiment.

As Wednesday drew to a close, the markets remained fluid, with mixed performances across global indices and heightened investor caution amid ongoing geopolitical tensions. The S&P 500 ended flat, with optimism from Nvidia’s strong earnings minimised by concerns over rising tensions between Russia and Ukraine. European markets faced a similar struggle, weighed down by inflation data and geopolitical uncertainties. In the Asia-Pacific region, markets were largely lower as investors digested mixed economic data from Japan and China. Treasury yields rose in response to heightened geopolitical risks, and oil prices slipped despite escalating conflict. With geopolitical developments continuing to drive market sentiment, investors remain cautious, looking for clearer signals on the economic horizon.