Nvidia Slides as FTSE 100 Hits Record

Nvidia shares fell sharply on Thursday after its latest results failed to sustain momentum in artificial intelligence stocks, pulling the S&P 500 and Nasdaq lower. In contrast, the FTSE 100 closed at a record high, lifted by strong gains in Rolls-Royce and London Stock Exchange Group following upbeat earnings and a share buyback. The US dollar strengthened through February, while sterling drifted lower. Gold held firm near recent highs and oil prices edged up amid ongoing US-Iran tensions.

Equities

The FTSE 100 closed 0.4% higher on Thursday at 10,846.70, setting a fresh record high and extending its strong run through February. The FTSE 250 also ended the session up 0.4%. The blue-chip index has climbed steadily this month and continues to outperform several overseas peers.

Rolls-Royce closed 9.1% higher on Thursday after reporting a 40% rise in annual profit and upgrading its medium-term targets. Management pointed to strong demand for aero-engines and growing power requirements from data centres. The results lifted the wider aerospace and defence sector to record levels. London Stock Exchange Group ended the day 6.7% higher after announcing a share buyback, responding to pressure from activist investor Elliott Management and addressing concerns about artificial intelligence affecting parts of its data business. RELX gained 4.6% by the close, recovering alongside other global software and information stocks.

Not all UK shares advanced. Hikma Pharmaceuticals finished 15.8% lower, hitting a more than three-year low after forecasting slower annual revenue growth.

On Wall Street, the tone was weaker. The S&P 500 closed 0.54% lower at 6,908.86 on Thursday, while the Nasdaq Composite fell 1.18% to 22,878.38. The Dow Jones Industrial Average edged 0.03% higher to 49,499.20. The Philadelphia Semiconductor index dropped 3.2%, leaving it on track to end a prolonged winning streak.

Nvidia closed 5.5% lower after its latest quarterly results failed to sustain recent enthusiasm around artificial intelligence, despite beating forecasts and issuing revenue guidance above market expectations. C3.ai sank 18.5% after projecting weaker current-quarter sales and announcing plans to cut 26% of its workforce. Trade Desk fell 4.8% following a disappointing revenue outlook.

There were gains elsewhere. Salesforce closed 4.0% higher even after issuing softer revenue guidance. J.M. Smucker rose 8.8% on the back of better-than-expected quarterly profit and sales. Celsius Holdings advanced 6.9% after beating revenue estimates, while major banks including JPMorgan Chase, Bank of America and Wells Fargo supported the Dow with solid gains.

Forex & Commodities

Currency markets were centred on the US dollar and the euro early this morning as investors reassessed interest rate expectations on both sides of the Atlantic. The euro traded little changed at $1.181 and is heading for a modest monthly decline, reflecting caution over the European Central Bank’s policy path.

The US dollar has strengthened over the course of February after several Federal Reserve policymakers signalled they would be prepared to raise rates further if inflation remains persistent. Even so, markets continue to price in rate cuts later this year. Recent US labour data showed initial jobless claims edging higher last week, while the unemployment rate appears to have held steady, reinforcing the view of a resilient labour market.

Sterling traded at $1.349 in early dealings and is set for a monthly fall as traders assign a high probability to a Bank of England rate cut in March. In Asia, the onshore yuan slipped to 6.855 per dollar after the People’s Bank of China acted to slow its recent appreciation by adjusting its daily midpoint and scrapping foreign exchange risk reserves on some forward contracts. The Japanese yen edged up to 155.8 per dollar but remains weaker over the month as political appointments to the Bank of Japan’s board cloud the outlook for further tightening.

Spot gold held near $5,180 per ounce early this morning and remains on course for a seventh consecutive monthly gain, supported by lower US Treasury yields. Silver traded at $90.10, platinum at $2,398 and palladium at $1,835.

Brent crude rose to $71.11 a barrel and US WTI to $65.59, although both benchmarks are heading for a weekly decline as US-Iran nuclear talks continue and OPEC+ considers raising output in April.