Nvidia leads tech sector to fresh highs
The Nasdaq Composite has notched up another record high, marking its fourth gain in five sessions as technology stocks maintained their impressive momentum. The rally was spearheaded by Nvidia, which surged 4% after announcing plans to resume chip sales to China, providing fresh optimism for the semiconductor sector.
This latest advance underscores the market’s continued appetite for technology stocks, despite growing concerns about valuations. The chip giant’s move to re-enter the Chinese market represents a significant development, particularly given the ongoing trade tensions between the world’s two largest economies.
Investors appear to be betting that Nvidia’s strategic pivot will unlock new revenue streams and support the company’s dominant position in artificial intelligence (AI).
The semiconductor rally has broader implications for the technology sector, with chip stocks providing a catalyst for wider market gains. This momentum reflects the ongoing digitisation trend and growing demand for AI-powered solutions across various industries.
Banking sector delivers mixed signals as earnings season begins
The start of earnings season has produced a decidedly mixed picture for financial stocks. Citigroup emerged as a standout performer, climbing 3.7% after delivering a robust second-quarter (Q2) trading performance that exceeded market expectations. The bank’s strong results highlighted the benefits of volatility for trading revenues.
However, other major financial institutions struggled to maintain momentum following their results. JPMorgan, Wells Fargo, and BlackRock all declined after reporting, suggesting that investors remain cautious about the sector’s outlook. This divergence reflects the challenges facing banks as they navigate an uncertain interest rate environment.
The mixed performance underscores the importance of stock selection during earnings season. Individual company results can vary significantly, even within the same sector, making thorough analysis crucial for traders.
Inflation concerns mount as tariff impact emerges
June’s consumer price inflation (CPI) data has delivered an unwelcome surprise, posting its largest monthly increase in five months. While core inflation remained relatively moderate, Federal Reserve (Fed) officials have begun flagging early signs of tariff-related price pressures filtering through to consumers.
This development could complicate the central bank’s policy decisions in the coming months. The inflation uptick serves as a reminder that trade policies can have far-reaching consequences for price stability, particularly in an interconnected global economy.
The data suggests that tariffs are beginning to work their way through supply chains, potentially creating sustained upward pressure on consumer prices. This could limit the Fed’s flexibility in adjusting monetary policy.
In the Unitd Kingdom (UK), inflation continues to prove stubborn, with core price growth reaching 3.7% in June, ahead of the 3.5% forecast. Headline inflation also accelerated to 3.6% from 3.4%, keeping pressure on the Bank of England (BoE).