S&P500 Forecast: SPX hits a record high, boosted by Nvidia earnings

US futures

Dow future 0.2% at 39,750

S&P futures 0.72% at 5345

Nasdaq futures 1.17% at 18929

In Europe

FTSE -0.02% at 8368

Dax 0.25% at 18720

Nvidia earnings smash estimates fueling a chip & AI rally
S&P500, Nasdaq100 reach a record high
FOMC minutes were hawkish
Oil steadies after 3-days of losses

Nvidia earnings smash estimates overshadowing hawkish FOMC minutes

US stocks are pointing to record highs as Nvidia optimism offsets concerns over the Federal Reserve keeping interest rates high for longer.

The minutes of the latest FOMC meeting show that policymakers were concerned that inflation was not cooling as fast as anticipated, with some policymakers even prepared to raise interest rates further to cool inflation back to the target 2% level.

The meeting minutes came after a string of Federal Reserve officials this week warned that rates may need to stay high for longer owing to sticky inflation. While US CPI cooled in April for the first time this year, at 3.4%, it is still well above target.

Elsewhere, US jobless claims came in below expectations at 215k, down from 223k the previous week.

Looking ahead, attention will now turn to the PMI figures, which are expected to remain unchanged from April, at 51.3 for the services PMI and 50 for manufacturing. Stronger than forecast figures could raise further questions over the Fed’s ability to cut rates.

Corporate news

Nvidia is set to open 7% higher at a new record high after its earnings smashed analysts' expectations. Nvidia posted EPS of $6.12 on revenue of $26 billion, well ahead of forecasts of $5.60 and $24.6 billion, as profits and revenue surged 628% and 268% compared to the previous year. The company also announced a stock split of 10 for 1 on June 7th, which will take its share price from $950 to $95 while maintaining its total valuation.

The surge in Nvidia fueled optimism across global markets, helping the NASDAQ reach a record high. The impressive numbers and forecasts cemented investor optimism surrounding the rise of AI technology and suggest there's plenty more room for the AI rally to run.

Other chip stocks, such as Advanced Micro Devices Micron Technology, pushed higher, as did AI-related stocks, such as C3 AI and Super Micro Computers.

S&P 500 forecast – technical analysis.

The S&P 500 has risen to a fresh all-time high at 5350. The RSI is starting to tip into overbought territory. The next logical level is 5400. On the downside, a move below 5277 would negate the near-term uptrend. Below here, 5200 comes into play.

FX markets – USD falls, EUR/USD rises

The USD is falling after three days of gains as the upbeat market mood hurts demand for the safe-haven currency. However, losses could be limited amid hawkish Fed chatter.

EUR/USD is rising after business activity in the eurozone was stronger than expected. While the services PMI slipped modestly to 53.3, the manufacturing PMI posted a smaller-than-expected contraction. The data highlights the improving outlook in the region. Consumer confidence data is due shortly and is expected to improve.

GBP/USD is rising amid a weaker USD and as investors digest the news of a general election on July 4^th. Political uncertainty over the coming weeks could impact demand for sterling. Separately, US services PMI data came in weaker than expected, falling to 52.9 from 55, although manufacturing returned to growth.

Oil steadies after 3-days of losses

Oil prices are holding steady after three days of losses despite ongoing concerns over higher interest rates for longer in the US, which could hurt the oil demand outlook.

The minutes from the latest Federal Reserve meeting showed that the central bank discussed a possible rise in interest rates amid sticky inflation.

High interest rates for longer in the world's largest oil-consuming nation could slow economic growth and harm the demand outlook.

Meanwhile, US crude stockpiles rose by 1.8 million barrels last week, according to the EIA, higher than an expected 2.5 million barrel draw. Rising inventories point to tepid demand.

Meanwhile, on the supply side, the OPEC+ meeting is coming into focus ahead of the June 1st date meet, when the allies will decide on production levels.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.