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Nvidia’s shares slide for 3 days

Tuesday, June 25, 2024

Today’s headlines

What’s happening: Shares of Nvidia edged lower on Monday, extending its decline for the third consecutive day.

What happened: Last week Nvidia had surpassed Microsoft to become the world’s most valuable company.

The selloff in Nvidia’s stock has shaved $430 billion off the market cap in three days.

Why it matters: Nvidia’s shares have been on a strong uptrend for more than a year and have rallied so far in 2024. The stock has gained 190% in the past one year and is up 145% year to date.

The runup took Nvidia’s market cap past the $3 trillion mark earlier this month, overtaking Apple. Last week, the chipmaker surpassed Microsoft to become the world’s most valuable company.

Till a couple of years ago, the company’s chips were known mostly to gamers, who bought its hardware to play multiplayer games online. Nvidia’s GPUs (graphic processor units) grabbed the spotlight when markets saw the massive backlogs in the chipmaker’s order-books from companies investing in AI.

Although Nvidia has launched GPUs with more than ten thousand cores to make machine learning faster, it is no longer just a hardware company. Nvidia has launched a complete ecosystem of software and services that are being used for creating AI applications.

The latest fillip had come after the company reported strong first-quarter results and announced a 10:1 stock split.

After months of rallying, Nvidia’s stock shed 13% over the last three trading days, mainly on profit taking. The shares declined by 6.68% to close at $118.11 and extended its losses in after-hours trading by 1.32%.

What to watch: Investors will monitor investments by companies in AI, which will impact Nvidia’s profits ahead. Markets will also watch the company’s order backlogs and consensus estimates for the current quarter and year.

The markets today

The Canadian dollar will be in focus today ahead of the release of important economic data

Context: The CAD/USD forex pair climbed on Monday, supported by higher gold and crude prices.

Details: The Canadian dollar has been on a broader uptrend since the first week of this month, after falling to a five-week low of 1.376 on June 7.

A rise in the price of crude oil, one of Canada’s major exports, lent support to the loonie. WTI for August delivery rose 90 cents, or 1.1%, to settle at $81.63 a barrel on Monday.

Weakness in the US dollar also drive the CAD/USD forex pair higher. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged lower to 105.43 on Monday.

Bank of Canada’s Governor Tiff Macklem said during a speech on Monday that interest rate cuts were “reasonable” to expect in case inflation fell back to the central bank’s target.

The CAD/USD forex pair rose around 0.12% to 0.7330 on Monday. The S&P/TSX Composite Index gained 1.36% to close at 21,848.59.

What to watch: Investors await the release of economic data on inflation and manufacturing sales from Canada today. Analysts expect Canada’s annual core inflation to remain constant at 1.6% in May, after declining to this figure in April from March’s 2%. The country’s manufacturing sales, which grew by 1.1% in April, is expected to decelerate to 0.7% in May.

Other Markets: European indices closed higher on Monday, with the STOXX Europe 600, DAX 40, CAC 40 and FTSE 100 up by 0.73%, 1.73%, 0.89% and 0.53%, respectively.

The news shaping the markets

Russia warns the US of a retaliation to Ukraine’s attack on the city of Sevastopol. The news sent the RUB/USD slightly lower in forex trading this morning.


Mexico’s annual core inflation rate declined to 4.17% in the first two weeks of June, from 4.31% in the same period in May. The figure coming in better than market estimates of 4.19% lent support to the MXN/USD forex pair.


India swung to a current account surplus of $5.7 billion in the first quarter of the year, from a deficit of $1.3 billion deficit in the previous three-month period. This being the first surplus since the quarter ending June 2021 sent the INR/USD higher in forex trading this morning.


Brazil’s foreign direct investments reached $3 billion in May. The figure coming in significantly lower than market estimates of $4.75 billion exerted pressure on the BRL/USD forex pair.


Australia’s Westpac-Melbourne Institute Consumer Sentiment index fell 2.4% to 82.4 points in April. This being the second consecutive month of decline sent the AUD/USD slightly lower in forex trading this morning.

What else to watch today

Japan’s leading economic index, South Africa’s leading business cycle indicator, Spain’s GDP growth rate and PPI, Turkey’s tourist arrivals, US Fed Bowman speech, house price index, CB consumer confidence, money supply, Richmond Fed manufacturing shipments index and API crude oil stock change.


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