S&P500 Forecast: SPX hits a record high, boosted by Nvidia earnings

US futures

Dow future 0.2% at 39,750

S&P futures 0.72% at 5345

Nasdaq futures 1.17% at 18929

In Europe

FTSE -0.02% at 8368

Dax 0.25% at 18720

Nvidia earnings smash estimates fueling a chip & AI rally
S&P500, Nasdaq100 reach a record high
FOMC minutes were hawkish
Oil steadies after 3-days of losses

Nvidia earnings smash estimates overshadowing hawkish FOMC minutes

US stocks are pointing to record highs as Nvidia optimism offsets concerns over the Federal Reserve keeping interest rates high for longer.

The minutes of the latest FOMC meeting show that policymakers were concerned that inflation was not cooling as fast as anticipated, with some policymakers even prepared to raise interest rates further to cool inflation back to the target 2% level.

The meeting minutes came after a string of Federal Reserve officials this week warned that rates may need to stay high for longer owing to sticky inflation. While US CPI cooled in April for the first time this year, at 3.4%, it is still well above target.

Elsewhere, US jobless claims came in below expectations at 215k, down from 223k the previous week.

Looking ahead, attention will now turn to the PMI figures, which are expected to remain unchanged from April, at 51.3 for the services PMI and 50 for manufacturing. Stronger than forecast figures could raise further questions over the Fed’s ability to cut rates.

Corporate news

Nvidia is set to open 7% higher at a new record high after its earnings smashed analysts' expectations. Nvidia posted EPS of $6.12 on revenue of $26 billion, well ahead of forecasts of $5.60 and $24.6 billion, as profits and revenue surged 628% and 268% compared to the previous year. The company also announced a stock split of 10 for 1 on June 7th, which will take its share price from $950 to $95 while maintaining its total valuation.

The surge in Nvidia fueled optimism across global markets, helping the NASDAQ reach a record high. The impressive numbers and forecasts cemented investor optimism surrounding the rise of AI technology and suggest there's plenty more room for the AI rally to run.

Other chip stocks, such as Advanced Micro Devices Micron Technology, pushed higher, as did AI-related stocks, such as C3 AI and Super Micro Computers.

S&P 500 forecast – technical analysis.

The S&P 500 has risen to a fresh all-time high at 5350. The RSI is starting to tip into overbought territory. The next logical level is 5400. On the downside, a move below 5277 would negate the near-term uptrend. Below here, 5200 comes into play.

FX markets – USD falls, EUR/USD rises

The USD is falling after three days of gains as the upbeat market mood hurts demand for the safe-haven currency. However, losses could be limited amid hawkish Fed chatter.

EUR/USD is rising after business activity in the eurozone was stronger than expected. While the services PMI slipped modestly to 53.3, the manufacturing PMI posted a smaller-than-expected contraction. The data highlights the improving outlook in the region. Consumer confidence data is due shortly and is expected to improve.

GBP/USD is rising amid a weaker USD and as investors digest the news of a general election on July 4^th. Political uncertainty over the coming weeks could impact demand for sterling. Separately, US services PMI data came in weaker than expected, falling to 52.9 from 55, although manufacturing returned to growth.

Oil steadies after 3-days of losses

Oil prices are holding steady after three days of losses despite ongoing concerns over higher interest rates for longer in the US, which could hurt the oil demand outlook.

The minutes from the latest Federal Reserve meeting showed that the central bank discussed a possible rise in interest rates amid sticky inflation.

High interest rates for longer in the world's largest oil-consuming nation could slow economic growth and harm the demand outlook.

Meanwhile, US crude stockpiles rose by 1.8 million barrels last week, according to the EIA, higher than an expected 2.5 million barrel draw. Rising inventories point to tepid demand.

Meanwhile, on the supply side, the OPEC+ meeting is coming into focus ahead of the June 1st date meet, when the allies will decide on production levels.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.