As we enter Friday’s trading session, markets remain on edge following Thursday’s notable movements and a slew of underwhelming economic data. NVIDIA’s much-anticipated earnings report, released Wednesday after the market close, set the stage for Thursday’s trading, but geopolitical tensions and weak European economic indicators quickly stole the spotlight.
NVIDIA delivered an impressive earnings report on Wednesday evening, surpassing expectations with strong EPS and revenue figures. However, the reaction on Thursday was muted, with NVIDIA initially dropping in pre-market trading before recovering slightly during the session. Traders seemed hesitant to push the stock significantly higher, suggesting that much of the optimism surrounding the company’s results was already priced in. Despite NVIDIA’s resilience, U.S. indices struggled, with the S&P 500 and NASDAQ facing selling pressure late in the session, raising concerns about broader market sentiment.
Friday’s early action has been dominated by a dismal set of PMI data from Europe, which continues to weigh heavily on the Euro and other European assets. Manufacturing and services PMIs from France, Germany, and the Eurozone all came in below expectations, with most dipping below the critical 50 mark, signaling economic contraction. The British Pound also suffered after UK PMIs followed a similar trend, further eroding confidence in the region’s economic stability.
The Euro hit its lowest level in two years on Friday morning, highlighting the ongoing divergence between the U.S. and European economies. With weak data piling up and geopolitical uncertainties persisting, traders are increasingly favoring safe-haven currencies like the U.S. Dollar and Swiss Franc.
The escalating conflict in Ukraine continues to unsettle markets. Reports of intercontinental ballistic missile use by Russia and the ongoing threat of further escalation have fueled demand for safe-haven assets. While the Japanese Yen and Swiss Franc gained some ground earlier in the week, they struggled to hold those gains on Thursday, reflecting the broader market’s unsettled nature.
Commodities experienced mixed fortunes on Thursday, with energy markets leading the way. Natural gas surged over 20% this week, while oil extended its gains with a 4.5% weekly increase, supported by supply concerns and geopolitical risk.
As of Friday morning, U.S. futures are pointing to a mixed open, with investors cautiously digesting Thursday’s movements. European indices are struggling, weighed down by weak economic data, while U.S. indices appear more stable but remain vulnerable to bearish sentiment. On the currency front, the Euro and British Pound are under intense pressure, while the U.S. Dollar continues to dominate, supported by safe-haven flows.