European markets slide amid tariff concerns, Nvidia's performance in focus

European stock markets faced pressure as concerns over potential tariffs and corporate earnings weighed on investor sentiment. The broader European index saw a decline, led primarily by the auto sector, following indications of possible trade restrictions that could impact exports. Meanwhile, mixed corporate earnings reports from major firms contributed to market uncertainty.

AI chipmaker’s results and market reaction

The technology sector remained in focus as a leading semiconductor company, heavily involved in AI-driven demand, delivered quarterly results that, while surpassing expectations, failed to generate the enthusiasm seen in previous quarters. Revenue projections for the upcoming quarter remained solid, though slightly below some of the more optimistic market forecasts. Additionally, concerns over narrowing profit margins due to increasing production costs and potential trade restrictions contributed to the cautious investor response.

US markets show signs of resilience

Across the Atlantic, U.S. stock futures indicated a positive open as major indices rebounded from earlier losses. Optimism surrounding corporate earnings and expectations for monetary policy stability provided support. However, economic indicators, including housing market data and upcoming inflation readings, remained on the radar for potential market-moving developments.

Bond yields and currency markets shift

In the fixed-income space, government bond yields experienced slight upward movement, reflecting investor positioning ahead of key economic data releases. The dollar strengthened against a basket of major currencies, while the Japanese yen saw notable declines. Cryptocurrency markets also exhibited volatility, with Bitcoin rebounding from recent lows.

Commodities and global economic outlook

Commodities markets reflected a mixed sentiment, with crude oil prices stabilizing after recent declines, while gold faced pressure amid shifting risk appetite. Market participants continued to assess broader economic trends and geopolitical risks as they navigated the evolving landscape.

Key developments to watch

As the week progresses, attention will remain on global trade developments, corporate earnings, and economic indicators that could influence sentiment across asset classes.

DXY remains below the 100-day moving average

The US Dollar Index has stayed below its 100-day moving average for the longest period since October. The technical indicators are far from being oversold, which keeps the bearish outlook unchanged for now. However, a break below the 106.40 support level is necessary to pave the way for further declines, potentially towards 105.50. On the upside, any retracement is likely to be capped below 107.00, according to the price/time method.

Gold below $2900

Gold has experienced a sharp decline over the past few days after failing to break above the 2955 resistance level. This has led to another downward movement toward 2877 earlier today, approaching the 2870 support level, which should be monitored closely. A break below this support could lead to further declines, possibly down to 2800 in the coming days. Conversely, the 2900 mark has now become a significant resistance level.

Brent bounced off support

Brent crude oil prices held above $72 during yesterday’s trading session, resulting in another bounce towards $72.90 earlier today. Brent has maintained solid support between $72 and $70 for over two years. Additionally, the technical indicators are gradually improving, suggesting a potential upward movement, possibly reaching $73.60 in the near term.

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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