Written by Medha Singh and Ankur Banerjee
(Reuters) – Global stocks fell on Thursday after AI bellwether Nvidia’s (NASDAQ: ) revenue growth forecast failed to impress investors, while the dollar strengthened and bitcoin hit a record high, renewed by hopes about the policies of US President-elect Donald Trump.
Geopolitical concerns following the escalation of the Ukraine-Russia conflict earlier this week have fueled risk sentiment, lifting safe-haven gold and boosting oil prices.
But it stood out from the earnings of Nvidia, the world’s most valuable company, which reported its slowest revenue growth in seven quarters. Futures trailing the tech-edge Nasdaq were down 0.6%, while the pan European was down 0.3%.
MSCI’s gauge of global shares fell 0.1%, after being range-bound for nearly a week.
“While we do not doubt that there will be strong demand for Nvidia products, that does not mean that the growth rate will be sustainable and that is what investors care about,” said Michael O’Rourke, a market strategist at JonesTrading.
“No company experiences this kind of growth forever.”
Indeed, Nvidia’s fourth-quarter forecast revealed the company’s revenue growth will slow to around 69.5% from 94% in the third quarter. Demand for the company’s AI chips, which dominate the market, remained strong.
Charu Chanana, Saxo’s chief investment strategist, said Nvidia’s earnings clearly show that momentum in AI is only growing, as things move ahead of demand.
“The structural AI tailwind could continue to be a key driver of equities well into the year ahead.”
Elsewhere in Asia, bourses in China and Hong Kong were mixed, while tech heavyweights in Taiwan fell 0.6%.
Attention was also on India’s Adani Group after US prosecutors said Gautam Adani, the group’s billionaire chairman, was indicted in New York for his role in a multibillion-dollar bribery and fraud scheme.
The news knocked $30 billion off the market value of Adani Group companies and sent Indian equity indexes lower.
THE RISING OLD
The dollar has been rising since the US election on expectations that the Trump administration’s proposed tariffs will likely increase and keep prices high for a long time.
The , which measures the US currency against six rivals, was at 106.62, not far from the one-year high of 107.07 touched last week. The index is up more than 2% since the November 5 election. [FRX/]
Hopes that the Federal Reserve is tapering off its rate-cutting cycle also boosted the dollar. Markets were pricing in the Fed to cut borrowing costs by 25 basis points next month to 55.7%, down from 72.2% last week, according to CME’s FedWatch Tool.
The two Federal Reserve governors on Wednesday offered competing views on where US monetary policy might be headed, with one citing concerns about inflation and the other expressing confidence that price pressures will continue to ease.
“Markets are waiting for some direction. Equity markets look a little higher here. The next data points will give direction,” said Peter Schaffrik, chief global strategist at RBC Capital Markets.
The focus will also be on the euro area business survey on Friday which could provide clues to the European Central Bank’s policy direction as the bloc’s currency threatens to fall below 1.05 against the dollar, Schaffrik said.
The common currency briefly broke that level on Friday and has been sideways since then. It ended at $1.053175.
The rise in the dollar led the Japanese yen back to the intervention zone, prompting a verbal warning from officials. On Thursday, the Japanese currency strengthened to 154.54 per dollar after falling as much as 155.86 in the previous session.
has been on a tear since the election as the Trump administration is expected to loosen regulations and become crypto friendly.
The world’s largest cryptocurrency, bitcoin, rose to a record high of $97,902 and was just a touch lower at $97,611.
In commodities, oil prices rose due to concerns caused by the ongoing war between Russia and Ukraine.
futures firmed about 1% to $73.61, while US West Texas Intermediate crude futures gained 1.3% at $69.63. [O/R]
Gold prices were rising for the fourth consecutive period of demand for the safe-haven asset. up 0.6% at $2,665 per ounce. [GOL/]
