Stocks dip on Ukraine jitters

Stocks fell as traders remained anxious about the ongoing war in Ukraine, while Nvidia Corp.’s revenue forecast fell short of high expectations. Meanwhile, Bitcoin approached the $100,000 mark.

Contracts for the S&P 500 indicated the first decline of the week, with Nvidia’s stock dropping more than 3% in premarket trading in the U.S. Europe’s Stoxx 600 index also declined, slipping by 0.3%. Treasury yields edged lower, and the index measuring dollar strength remained stable.

Oil and Gold prices rose, and European natural gas prices surged to their highest levels in a year due to increasing concerns over the Russia-Ukraine conflict. Ukraine reported that Russia launched an intercontinental ballistic missile during an overnight attack, while a Kremlin spokesman described Kyiv’s recent use of UK Storm Shadow missiles as a new escalation in the conflict.

Traders will be monitoring U.S. initial jobless claims later on Thursday for indications of economic strength and the Federal Reserve’s interest rate trajectory. Additionally, there is anticipation regarding the expected decision on President-elect Donald Trump’s nominee for Treasury Secretary.

Nvidia says new chip on track after forecast disappoints

Nvidia Corp. reassured investors that its new product lineup can sustain the company’s growth driven by artificial intelligence (AI). However, the rush to manufacture these chips is proving to be more expensive than anticipated.

During a conversation following the release of quarterly results, Chief Executive Officer Jensen Huang stated that Nvidia’s highly anticipated Blackwell products will be shipped this quarter in response to “very strong” demand. Nevertheless, the production and engineering costs of these chips will impact profit margins, and Nvidia’s sales forecast for the current period did not meet some of Wall Street’s more optimistic expectations.

This led to a lukewarm response from investors, who had driven Nvidia shares up nearly 200% this year before the earnings report. Following such a significant rally that positioned the chipmaker as the world’s most valuable company, anything less than an outstanding quarter was likely to be seen as disappointing. As a result, shares fell about 4% in premarket trading.

Nvidia has projected fiscal fourth-quarter sales of approximately $37.5 billion. While the average analyst estimate is $37.1 billion, some projections reached as high as $41 billion.

DXY remains heavily overbought

The US Dollar experienced another rally in yesterday’s trading, approaching the resistance level of 107.0 before pulling back to around 106.50. This movement is largely associated with the ongoing geopolitical tensions. However, since the technical indicators are heavily overbought, the US Dollar Index may have limited potential for further gains.

The key resistance level is between 107.0 and 107.30, where it may face difficulties in making further gains. Conversely, the key support level is around 106.0, which remains strong. Additionally, historical trends do not favor another rally, particularly in December, as has been the case for the past four years.

Gold over $2670

Gold prices surged once again, marking their fourth consecutive day of gains and increasing by more than $100, or 4%, over this period. This rise occurs despite a rally in the US Dollar, with the primary catalyst likely being the ongoing geopolitical tensions between Ukraine and Russia.

Meanwhile, technical indicators are strongly bullish, suggesting the possibility of further increases toward the next resistance level, which currently stands at around $2,685. On the downside, any potential retracement is likely to remain limited above $2,630 for now.

Brent bullish outlook

Brent Crude is showing more signs of potential gains after breaking through the $73.20 resistance level earlier today, reaching a peak of $74.15 by the time this report is being released. This rally has shifted the technical indicators upward, suggesting further increases in the coming days.

At the moment, geopolitical tensions may be a catalyst for these changes as traders await OPEC+’s decision regarding production increases. If Brent continues to trade above $73.20, further gains are expected, with the next key resistance level at $75.80.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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