Market Report.
🌅 Let’s start the day by reviewing last night’s news on Wall Street.
🤖 Nvidia CEO Jensen Huang pushed back on fears that AI will cannibalize the enterprise software industry, arguing that the “markets got it wrong” on this issue.
📺 Jensen Huang in an interview with CNBC’s Becky Quick said that demand for computing was “off the charts” as AI tech rapidly advances. When asked about the threat of AI to software, Huang said that “the markets got it wrong.”
💬 “Nobody’s going to service better than ServiceNow, and they’re going to come up with agents that are really fine-tuned and optimized for the work that uses the tools that they have,” he said, adding that AI was “going to help us.”
🛠️ Huang believes that AI agents will actually use software tools like ServiceNow, Cadence, Synopsys, and SAP to become more productive, rather than replacing them. He cited examples like web browsers and Microsoft Excel, saying AI agents will leverage these tools instead of making them obsolete.
🔌 Anthropic’s announcement of new connectors and plugins for its AI tool Claude Cowork, allowing integration with existing apps, was seen as positioning AI as additive rather than threatening to software providers.
📈 Nvidia shares rose 1.4% ahead of the company’s earnings report after the bell, as investors look for signs of continued strong demand for its AI chips. Fellow AI player Oracle also jumped 1% after being upgraded by Oppenheimer, leading a broader rebound in software stocks.
✅ Nvidia reported better-than-expected results for the January quarter, with revenue and earnings beating market estimates. The company also issued an upbeat revenue forecast for the current quarter.
⏸️ However, Nvidia’s stock traded flat after hours, as investors were likely disappointed that the results did not significantly exceed expectations, given the company’s recent track record of solid revenue beats.
⚔️ Nvidia is facing increasing competition in the AI chip market, with rivals like AMD and Google’s in-house TPU chips gaining traction with major tech customers like Meta and Anthropic. The company’s sales concentration among a few key customers has crept up, with two customers now accounting for 36% of its total revenue.
🇨🇳 Nvidia said its current-quarter forecast does not include any expected revenue from sales of its data center chips to China, as it has only recently received licenses to ship “small amounts” to Chinese customers after export restrictions.
🏛️ The White House is seeking to mitigate the political risks associated with the growth of data centers and AI by having the major tech companies take responsibility for their own power needs, in an effort to prevent rising electricity costs for consumers.
🤝 President Donald Trump will meet with executives from major tech companies including Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI at the White House next week. The companies will sign a pledge to supply their own power for their artificial intelligence data centers, ensuring that Americans’ electricity bills do not increase as demand grows.
🏘️ This initiative is in response to growing opposition to data centers in communities across the U.S., as people blame rising utility bills on the facilities’ huge electricity consumption.
⚡ The administration has warned the tech companies that they risk a backlash if the public believes their data centers are driving up energy costs, and wants to see data centers developed with up-front investments in additional grid infrastructure.
🔋 Remember that one of the projects we mentioned in past reports was the British Rolls-Royce project, which was to produce micro nuclear reactors that can be used in US data centers.
🌏 The upcoming U.S.-China meetings and China’s own domestic policy decisions will be closely watched for their implications on economic relationship between the two countries.
🏛️ China’s annual parliamentary meeting starting next week, where the government will announce growth targets and stimulus plans.
🤝 The highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping, expected to take place from March 31 to April 2.
📑 Tariff cuts and guidelines to prevent the relationship from being disrupted by short-term developments are likely to be on the agenda.
📉 The U.S. share of China’s overall exports has fallen sharply in recent years, reducing the U.S. tariff leverage over Beijing. China’s exports, particularly of chips and power equipment, are closely linked to the U.S. economy’s growth in artificial intelligence. An AI bust could lead to a plunge in China’s exports, forcing Beijing to step up domestic stimulus.
🚀 China is accelerating its own AI push, with homegrown startups and tech giants rolling out new models ahead of a widely anticipated update from domestic AI company DeepSeek.
🔎 But undoubtedly, the key will be in the latest developments regarding other topics, such as China’s loss of control over Panama Canal assets, the rapid progress of Chinese humanoid robots, and the recent performance of Chinese and Hong Kong stocks.
🇬🇧 UK: The British public’s expectations for inflation over the coming year and further ahead fell sharply in February, according to a monthly survey by YouGov for U.S. bank Citi: Short-term inflation expectations fell to 3.3% in February from 3.8% in January. Long-term inflation expectations fell to 3.6% from 4.1%.
🏦 Citi said there may be “cautious reason for optimism” that this could represent a “level shift” in inflation expectations. Bank of England Governor Andrew Bailey said an interest rate cut in March was a possibility, although services price inflation had not fallen as much as hoped.
📊 The drop in public inflation expectations, if sustained, could provide the Bank of England with more flexibility to consider interest rate cuts in the near future
🇯🇵 Japan: Takaichi administration’s appointments to the BOJ board signal a shift towards a more reflationist approach to monetary policy, which could slow the pace of interest rate hikes and potentially weaken the yen further.
🎓 The Japanese government has nominated two academics seen as strong advocates of economic stimulus to join the Bank of Japan’s (BOJ) board, in a move that reflects the Takaichi administration’s monetary policy preferences.
💴 The appointments of Toichiro Asada and Ayano Sato briefly sent the yen down past 156 per dollar and boosted the Tokyo stock market, as investors trimmed expectations about the speed of interest rate hikes.
📚 Asada and Sato are known as “reflationists” who advocate loose monetary and fiscal policies to prop up growth, even if it means increasing inflation and debt. The nominations follow similar appointments by Prime Minister Sanae Takaichi of people seen as economic reflationists, suggesting the administration’s preference for continued stimulus.
🛢️ The oil market remains focused on the potential for supply disruptions from a U.S.-Iran conflict
🇸🇦 Saudi Arabia is increasing its oil production and exports in case a U.S. strike on Iran disrupts supplies from the Middle East.
📈 OPEC+ is also likely to consider raising its oil output by 137,000 barrels per day for April, in anticipation of peak summer demand and the potential price boost from U.S.-Iran tensions.
📦 Gains in oil prices were capped by a large 16 million barrel build in U.S. crude inventories last week, which far exceeded market expectations.
🇮🇷 Iran sees a “good outlook” for the upcoming talks with the U.S. in Geneva, as a delegation led by Iranian Foreign Minister Abbas Araqchi prepares to meet with U.S. envoy Steve Witkoff and Jared Kushner.
🕊️ The two countries resumed negotiations over Iran’s long-disputed nuclear program earlier this month, as the U.S. builds up its military capability in the Middle East amid tensions. Araqchi previously said that a deal with the U.S. is “within reach, but only if diplomacy is given priority.”
🗣️ Marco Rubio says Iran has missiles that threaten U.S. military bases around Iran and the U.S. Navy that was just deployed near Iran. Apparently, the threat lies in the fact that they have placed their country too close to the US troops.
⚠️ By claiming that Iran is attempting to develop intercontinental ballistic missiles, Marco Rubio is attempting to persuade the American people that Iran is a real threat to the US, not to Israel, country with which it has exchanged attacks over the last two years.
☢️ Iran is attempting to construct nuclear weapons, according to Vance, “they’ve seen evidence.” They are essentially following the narrative as Iraq war.
Market View.
📈 A degree of optimism is returning to US equity markets, as strong Nvidia earnings may help restore bullish momentum.
📍 E‑mini S&P 500 futures have climbed above the 6,900‑point level, currently trading around 6,955 points.
💻 Nasdaq 100 futures approached 25,500 points in recent hours but have since eased slightly to 25,355 points, suggesting that the initial euphoria surrounding Nvidia’s results may prove short‑lived.
💵 After briefly returning to the 98 level, the US Dollar Index (DXY) has pulled back to approximately 97.65. This has allowed EUR/USD to move back above 1.18, currently trading near 1.1815.
🇪🇺 In Europe, futures showed optimism yesterday after it was confirmed that the tariff the United States will impose on Europe will be 10% rather than 15%.
🏆 The Euro Stoxx 50 reached fresh all‑time highs, approaching 6,200 points, before easing slightly to around 6,180.
🇩🇪 DAX 40 futures moved above 25,250 points, later retreating to approximately 25,200.
⛽ The oil market remains slightly elevated as investors await the outcome of negotiations between the United States and Iran, with Brent crude trading close to $71 per barrel. Further details have been covered in the news section.
🥇 Gold futures remain firm, trading above $5,200 per ounce, with bullish patterns continuing to form on the charts.
₿ Finally, Bitcoin showed signs of recovery in recent hours, climbing towards the $70,000 level, where it encountered resistance, before pulling back to around $68,155.
