The Nasdaq closed Friday at a new record high, lifted by a rally in Nvidia and other tech stocks, despite ongoing concerns about the Federal Reserve’s interest rate decisions. The S&P 500 also saw significant gains, while the Dow Jones Industrial Average posted modest increases. This comes as inflation data and economic indicators continue to shape investor sentiment, highlighting the delicate balance between market hope and caution. The AI boom and robust performance of tech giants continue to drive market momentum, even as the broader economic environment presents mixed signals.

Key Takeaways:

  • Nasdaq Reaches Record High Amid AI Enthusiasm: The Nasdaq Composite surged 1.1% to close at 16,920.79, marking its eleventh record close of the year. Nvidia shares climbed 2.6% to exceed $1,000 for the first time, fuelling the tech-heavy index’s advance. Nvidia’s strong earnings report highlighted its growing dominance in the AI sector, further boosting investor confidence.
  • S&P 500 and Dow Jones Show Modest Gains: The S&P 500 rose 0.7% to finish at 5,304.72, nearly achieving a new high. The index’s performance was boosted by gains in tech and consumer discretionary sectors. The Dow Jones Industrial Average edged up 4.3 points, or 0.01%, to 39,069.59, showing restrained optimism. Week-to-date, the S&P 500 inched up just 0.03%, while the Dow experienced a decline of 2.33%, marking its first negative week in five.
  • European Markets Close Lower: The Stoxx 600 index dropped 0.17%, while the FTSE 100 Index fell 1.22% for the week, closing at 8,317.59. Utilities led the losses, down 1.2%, while retail stocks rose 0.3%. Ocado shares rose by 6% as JPMorgan analysts raised their target price on the firm to 450 pence from 350 pence.
  • Asian Markets Decline: Hong Kong’s Hang Seng index fell 1.71%, and mainland China’s CSI 300 dropped 1.11% to 3,601.48. In South Korea, the Kospi ended 1.26% lower at 2,687.60, with Samsung Electronics shares falling 3.07% following reports of issues with their latest high bandwidth memory (HBM) chips. Japan’s Nikkei 225 slid 1.17% to 38,646.11, with core inflation easing to 2.2% from 2.6% in March, indicating potential shifts in the Bank of Japan’s monetary policy.
  • Oil Prices Rebound But Still Post Weekly Losses: US crude oil futures hit an intraday low of $76.15 before closing higher. Brent crude also bounced back but remains down 2.5% for the week. US crude oil settled at $79.97 a barrel, with May Brent futures rising to $83.94 a barrel, indicating a tightening market.

FX Today:

  • EUR/USD Sees Modest Gains: EUR/USD increased by 0.31% to 1.0847, climbing from the 1.0800 level. The pair is navigating around the 200-day Simple Moving Average (SMA) at 1.0830, indicating little directional momentum. If it breaches 1.0865, especially with a volume surge surpassing the previous session’s activity, a rally towards 1.0980 could follow. In the event of a bearish shift, initial support can be identified near 1.0810, with the 200-day SMA at 1.0785 acting as a critical level. A fall below this could see sellers target the 1.0725 level.
  • GBP/USD Confined Within Range: GBP/USD was trading at 1.2739, up 0.33%. The pair appears confined within a broad range, with retracement support at 1.24819. The 1.2800 level remains a significant resistance point. The 20-day moving average offers support around 1.2605. A breakout above 1.2800 could turn the outlook bullish, whereas a failure could suggest deeper falls.
  • USD/JPY Steady Near 157.00: USD/JPY mixed on Friday, wrapping up close to where it started the day, just below the 157.00 handle. The pair has closed in the green for all but three of the last 15 consecutive trading days, recovering from low near 152.00. The pair is still trading down from multi-year highs set in late April above 160.00, but continues to drift deeper into bull territory above the 200-day Exponential Moving Average (EMA) at 149.13.
  • USD/CAD Recovers Slightly: USD/CAD pulled back to 1.3670 from the week’s high of 1.3745. The pair remains higher on the week, trading near the 200-hour EMA at 1.3668, with a firm price floor at the 200-day EMA at 1.3553. Despite a retail sales miss in Canada, the Canadian dollar rebounded against the Greenback, with USD/CAD experiencing choppy chart conditions.
  • NZD/USD Bullish Momentum: NZD/USD rose to 0.6125, displaying strong upward momentum. The pair last traded at 0.6118, up 0.31%. Trading above the Simple Moving Averages (SMA) of 20 (0.6030), 100 (0.6070), and 200-day (0.6040), the NZD/USD pair maintains a bullish trend. The RSI trends suggest continued buyer strength, with targets set at 0.6150 and 0.6200 if momentum holds.
  • Gold Steadies and Gains Following Heavy Losses: Gold (XAU/USD) trades at $2,332 after bouncing off a daily low of $2,325. Gold’s uptrend remains in place despite retreating toward the $2,330 area. If XAU/USD climbs above $2,350, that would expose the $2,400 mark. Further gains lie ahead as buyers target the year-to-date high of $2,450, followed by the $2,500 mark. Conversely, if bears remain in charge, they need to push the XAU/USD below the $2,303, where the next low of $2,277 would follow.
  • Silver Price Analysis: Silver (XAG/USD) trimmed losses and remains bullish, clinging to gains above $30.00, hinting that buyer’s momentum remains strong. The XAG/USD first resistance would be $31.00. A breach of this will expose the $31.50 figure, followed by $32.00, and the year-to-date (YTD) high reached at $32.50. Conversely, XAG/USD’s first support would be the $30.00 psychological level. 

Market Movers:

  • Deckers Outdoor Leads S&P 500 Gains: Deckers Outdoor surged more than 14%, reporting Q4 net sales of $959.8 million, well above the consensus of $884.4 million. The company’s strong performance underscores its robust market position and effective operational strategies.
  • Ross Stores Excels in Nasdaq 100: Ross Stores rose over 7% after reporting Q1 EPS of $1.46, surpassing the consensus of $1.35. The retailer also raised its 2025 EPS forecast to $5.79-$5.98 from a previous forecast of $5.64-$5.89, reflecting strong future growth expectations.
  • Chip Stocks Rally: Following Nvidia’s strong earnings report, Qualcomm (QCOM) and Super Micro Computer (SMCI) each gained more than 4%. Advanced Micro Devices (AMD) closed up more than 3%, while Nvidia (NVDA), Micron Technology (MU), ASML Holding NV (ASML), and Marvell Technology (MRVL) each rose over 2%.
  • Dell Technologies Continues Upward Trend: Dell Technologies rose over 3%, adding to Thursday’s 4% gain after Evercore ISI added the stock to its tactical outperform list with a price target of $165. Dell’s performance reflects positive investor sentiment and strategic positioning in the tech market.
  • Booz Allen Hamilton Gains: Booz Allen Hamilton closed up over 3% after reporting Q4 adjusted EPS of $1.33, stronger than the consensus of $1.23. The firm also forecasted 2025 adjusted EPS of $5.80-$6.05, with the midpoint above the consensus of $5.92, indicating strong future growth potential.
  • Intuit and Workday Decline: Intuit fell more than 8% after forecasting Q4 adjusted EPS of $1.80-$1.85, weaker than the consensus of $1.93. Workday dropped over 15% following a cut in its full-year subscription sales forecast to $7.73 billion from a previous estimate of $7.78 billion.
  • Salesforce Declines on Insider Selling: Salesforce (CRM) closed down more than 2% on signs of insider selling after an SEC filing showed their CEO sold $4.28 million of shares on Wednesday. This move raised concerns among investors about the company’s future performance.
  • Exact Sciences Falls After Competitor’s FDA Approval: Exact Sciences (EXAS) closed down more than 8% after rival Guardant Health’s Shield blood test to screen for colorectal cancer received the support of an FDA advisory panel. The approval signals increased competition in the medical diagnostics market.

As the market wraps up another eventful week, the record highs of the Nasdaq and gains in the S&P 500 reflect robust enthusiasm for tech stocks, particularly in the AI sector. Despite concerns over the Federal Reserve’s interest rate decisions and mixed economic signals, investors continue to navigate a landscape of economic indicators, corporate earnings, and geopolitical developments, all while keeping a close watch on the evolving dynamics of inflation and monetary policy. The rise in tech stocks, driven by AI advancements, and the strategic movements in various sectors, highlight a market that is both resilient and forward-looking, ready for further developments in the coming months.