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Latest Market Updates: NVIDIA’s Market Cap, US Retail & RBA Decision

Plus500 | Wednesday 19 June 2024

Despite this shortened trading week (due to Juneteenth), traders, consumers, and analysts may have experienced an eventful time so far. News from the stock market, central banks, and economic data caused volatility on Tuesday, June 18, and here’s what you need to know:

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NVIDIA Dethrones Microsoft: How It Became the World’s Most Valuable Public Company

NVIDIA (NVDA) is no stranger to the spotlight, especially in recent years, as booming demand for AI has sparked a notable rise in its value, causing the tech giant to gain over 181% since the beginning of 2024. 

While these gains may have impressed many, NVIDIA’s stellar performance peaked yesterday, Tuesday, June 18, when it became the world’s most valuable publicly-traded company, surpassing its tech rival Microsoft (MSFT). As a result, on that day, NVIDIA's stock rose by about 4%, while Microsoft's slid by 0.3%.

It may also be interesting to note that this market valuation shift is considered one of the “fastest on record,” as the company moved from its $2 trillion valuation (in March 2024) to $3 trillion (yesterday) in less than three months.

What Caused This?

Perhaps unsurprisingly, the surge in AI demand has propelled the company to all-time highs in sales and profits. According to experts like Ben Barringer, the company’s demand shows no signs of abating. 

Furthermore, many traders and investors are bullish on this giant, believing it is poised for further growth. 

However, only time will tell what the future holds for this industry leader.

US Retail Sparks Expectations of Fed Rate Cuts

The possibility of Fed interest rate cuts has been a topic of discussion for the past couple of months as market participants look for signs of easing inflation and lower rates. Nevertheless, in the past couple of FOMC meetings, the Fed maintained rates unchanged at a high of 5.25% despite the anticipation of dovish cuts.

Nonetheless, the recent US retail sales data released on Tuesday, June 18, may have sparked expectations of rate cuts. This is because the data showed that people spent less money at stores in May than expected. This weaker spending made some investors and traders believe the Federal Reserve might lower interest rates to aid the ailing economy. 

However, whether or not their expectations would come to fruition is yet to be determined. Traders, consumers, and analysts will have to wait for the Fed’s upcoming meeting on July 30-31 to see what this major central bank will decide. 

How Did the US Markets React to Tuesday’s News?

Leading Wall Street indices like the S&P 500, the tech-heavy Nasdaq (US-TECH 100), and the Dow Jones Industrial Average (USA 30) all gained 0.25%, 0.03%, and 0.15%, respectively, on Tuesday. 

RBA Rate Decision: What Does It Mean?

The Reserve Bank of Australia (RBA), Australia’s central bank, convened on Tuesday, June 18, and announced its decision to maintain unchanged interest rates

The bank noted that the labor market's challenges may be easing, and wages are growing, but output growth remains subdued. Additionally, the decision highlighted Australia’s inflation, which is decreasing at a slower rate than anticipated. 

Michele Bullock, the RBA’s Governor, also mentioned that the likelihood of rate hikes is currently diminishing. It will be intriguing to observe how Australia’s economy evolves and its potential impact on the Forex market. (Source: Yahoo Finance)

Conclusion

This week has been eventful so far as news from both the financial and economic realms emerged, providing traders, consumers, and analysts with much-needed information about the possible trajectory of the economy and the financial markets. What does the future have in store? What other events should traders be aware of? Only time will tell.


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