The leading U.S. stock market indices are forecasting a lower start on Tuesday, hinting at a possible pullback period after a strong performance in the previous trading session. Major technology firm Nvidia is anticipated to lead this trend, with its stock falling by 2.7 percent in pre-market trading.
Stocks could also take a hit from the 10.6 percent fall of Super Micro Computer's shares, following its recent announcement of a proposed underwritten registered public offering of two million common stocks.
Market caution could be intensified by the forthcoming Federal Reserve policy announcement on Wednesday. It is generally believed that interest rates will remain unchanged, however, the Fed's consequent statement and economic projections could significantly influence future rates.
Interestingly, prior positive inflation readings have tempered expectations that the Fed will introduce its first interest rate cut in June.
In terms of sectoral performance, technology-led companies began with strong gains on Monday, driven largely by strong performances from Nasdaq and the S&P 500. Examples include the likes of Alphabet, whose shares rose 4.6 percent following reports of its ongoing collaboration with Apple to integrate Google's Gemini AI engine into the iPhone. Nvidia also saw a brief surge in stocks ahead of its GTC Conference, but this was lessened slightly by the end of the day. On the flip side, Super Micro Computer's stocks fell by 6.4 percent after it was recently added to the S&P 500.
Analysts and investors are eagerly waiting for further information from the Fed's forthcoming policy meeting. Meanwhile, the National Association of Home Builders has reported a surprising boost in U.S. homebuilder confidence this March. It revealed that the NAHB/Wells Fargo Housing Market Index rose from 48 in February to 51 in March, surpassing the half-way mark for the first time since July, when it was at 56.
In price fluctuation news, crude oil futures are slightly up at $82.76 a barrel, while gold futures are down by $8.60 at $2,155.70 an ounce. In currency trading news, the U.S. dollar's latest valuation has left it stronger against both the yen and the euro.
With multiple central bank decisions expected in the coming week, Asian stocks have been largely mixed. The yen was reported to be at 150 per dollar as the Bank of Japan ended its eight years of negative interest rates with an historic first-rate hike in 17 years. In contrast, the Australian dollar hit a two-week low following the Reserve Bank of Australia's decision to maintain interest rates at a twelve-year high.
On a related note, the Chinese markets declined after regulators accused Evergrande Group of inflating its revenue by over $78 billion. No change in the benchmark loan prime rate is expected following the People's Bank of China's decision on Wednesday.
Lastly, Japanese markets managed to recover early losses due to the Bank of Japan’s dovish stance, which promised consistent government bond purchases to sustain the economic recovery.
The Topix Index excelled today, closing 1.1 percent higher at 2,750.97. Considerable growth was seen among exporters including Sony, Honda Motor, Panasonic, and Toyota, each seeing a 1-3 percent climb. Unfortunately, tech giant Advantest Corp, a supplier for Nvidia, saw a slight dip of 1.2 percent, but Tokyo Electron made gains, improving by 1.5 percent.
On the other hand, tech companies pulled Seoul stocks down significantly today. Nvidia's recent unveiling of their new AI chip range, 'Blackwell', failed to stop SK Hynix from falling 2.5 percent. The Kospi Index closed at 2,656.17, down by 1.1 percent.
As predicted, the Reserve Bank of Australia held steady on interest rates. However, they gave a warning that the fight against inflation is still ongoing. Still, the Australian markets saw mild advancements, with both the benchmark S&P ASX 200 and All Ordinaries Index improving by 0.4 percent, closing at 7,703.20 and 7,957.80 respectively.
Meanwhile, European stocks remained largely static due to uncertainty, as traders anticipate the outcomes of this week’s Federal Reserve and Bank of England policy meetings. While the UK's FTSE 100 Index slightly dropped by 0.2 percent, the German DAX Index remained nearly steady and the French CAC 40 Index exhibited minor growth of 0.2 percent.
In company news, DEUTZ Group experienced a significant increase after another year of record earnings and meeting their guidance for the third year in a row. Trustpilot Group, an online platform that connects businesses and consumers, also saw shares rise after they reported a narrower full-year loss which was bolstered by higher revenues.
Unilever shares spiked after announcing plans to separate from their Ice Cream division and implement a major productivity program to stimulate rapid growth and enhanced profit margins. Furthermore, Close Brothers experienced growth after announcing its £400 million plan to strengthen its capital position.
On the other hand, airport operator Fraport took a hit, tumbling after its fourth-quarter EBITDA and 2024 guidance did not meet analyst expectations. Recruitment firm SThree also dropped 1.3 percent due to a tough jobs market in the early months of 2024.
In the American Economy, the Commerce Department's report showed substantial recovery in new residential construction in the U.S. for February, with housing starts spiking by 10.7 percent to an annual rate of 1.521 million. This, after it slumped by 12.3 percent to a revised rate of 1.374 million in January.
Moreover, building permits, another sign of future housing demand, saw a rise of 1.9 percent to an annual rate of 1.518 million in February. Later today, the Treasury Department plans to announce the results of its auction for twenty-year bonds valued at $13 billion.
