Moving markets today: Asian markets surge on Wall Street’s record; Nvidia surpasses Microsoft in market cap; UK pay awards edge higher; focus shifts to UK inflation data, BOE decision
US stocks achieved another round of record highs on Tuesday, marking the second consecutive day of gains fueled by Nvidia’s emergence as the world’s most valuable publicly traded company. This milestone propelled market optimism, mirrored in Asian markets which also reached their highest levels in three weeks on Wednesday, driven particularly by strong performances in the technology sector. Oil prices edged up slightly early Wednesday, despite concerns about escalating tensions in Europe and the Middle East overshadowing worries about an unexpected increase in US crude inventories. Meanwhile, gold prices remained stable on Wednesday following weaker-than-expected US retail sales data, reinforcing expectations of potential rate cuts by the Federal Reserve. Tuesday’s market shift saw Nvidia surpass Microsoft in market value, marking a significant development. Looking ahead, the focus shifts to the UK markets, anticipating key releases such as May’s inflation figures and the Bank of England’s monetary policy meeting over the next two days. In the US, markets will be closed on Wednesday in observance of the Juneteenth holiday, while British stocks, which closed higher on Tuesday, are expected to start cautiously on Wednesday based on futures indicators. Here are five key takeaways for your day.
UK pay awards slightly up in May: Brightmine
In the three months leading up to May, British employers increased their pay offers, according to a survey released on Wednesday. This suggests that the growth in wages, which significantly influences inflationary pressures, might not be easing as quickly as expected.
Data from Brightmine, a provider of human resources information, shows that median basic pay settlements rose by 4.6 per cent compared to the previous year. This was a slight increase from the revised figure of 4.5 per cent recorded for the three months ending in April (previously reported as 4.9 per cent).
The Bank of England has been closely monitoring these wage trends ahead of its upcoming interest rate decision on Thursday.
Chinese economy shows signs of sluggishness as copper glut grows
Chinese warehouses are seeing the largest copper surplus in four years. Following a spike in prices and sluggish consumer demand, manufacturers in Asia’s biggest economy have cut back on buying this vital industrial metal.
According to Bloomberg data, copper stocks in Shanghai Futures Exchange warehouses have reached about 330,000 tonnes this month, the highest level since 2020. This surplus highlights the fragile state of China’s industrial sector, the FT reported.
Nvidia surpasses Microsoft to become world’s most valuable company
On Tuesday, Nvidia claimed the world’s most valuable company, overtaking Microsoft. This leap is driven by Nvidia’s key role in the AI technology race, boosting its shares by 3.5 per cent to $135.58 and raising its market value to $3.335 trillion.
Just days before, Nvidia had surpassed Apple, now valued at $3.286 trillion, to become the second most valuable company. Microsoft’s market value declined to $3.317 trillion as its shares fell by 0.45 per cent. Nvidia’s impressive rise over the past year reflects the growing enthusiasm on Wall Street for emerging AI technologies, Reuters reported.
What’s on the radar
The next two days are pivotal for UK markets, with major events on the horizon including the release of May’s inflation figures and the Bank of England’s (BoE) monetary policy meeting.
The inflation report, due out before the market opens, is expected to show that Britain’s inflation rate dropped to the BoE’s 2 per cent target in May, down from 2.3 per cent in April.
This crucial data precedes the BoE’s decision on Thursday, where markets are betting on a nearly 90 per cent chance that rates will remain unchanged, with potential rate cuts anticipated in August or later this year.
Additionally, US markets will be closed on Wednesday in observance of the Juneteenth holiday.
Asia-Pacific markets surge after Wall Street hits record high
The S&P 500 rose by 0.25 per cent, closing at 5,487.03 points, while the Nasdaq Composite saw a marginal increase of 0.03 per cent, ending at 17,862.23 points. The Dow Jones Industrial Average also experienced a gain, climbing 0.15 per cent to finish at 38,834.86 points.
Notably, Nvidia surpassed Microsoft to become the world’s most valuable company, and other semiconductor stocks like Qualcomm, Arm Holdings, and Micron continued their upward trend, pushing the Philadelphia SE Semiconductor index to an all-time high.
In Asian markets, Japan’s Nikkei N225 advanced by 0.59 per cent, but China’s CSI300 blue-chip index fell by 0.42 per cent. Meanwhile, Hong Kong’s Hang Seng index surged by 1.3 per cent, South Korea’s Kospi rose by 1 per cent, and Japan’s Topix gained 0.7 per cent. Australia’s S&P/ASX 200 remained unchanged.
In Europe, EURO STOXX 50 futures slipped by 0.08 per cent. The FTSE 100 closed with a 0.6 per cent gain on Tuesday, but its futures pointed to a weak opening on Wednesday, dropping by 0.10 per cent to 8,186.0 points.
On the currency front, the dollar index, which measures the US dollar against six major currencies, was at 105.29.
In commodities, oil prices were volatile due to rising tensions between Russia and Ukraine and in the Middle East, which overshadowed concerns about demand following an unexpected increase in US crude inventories. Spot gold saw a slight increase, reaching $2,330.86 per ounce.