Between AI, rates, and oil: the market searches for direction
Nvidia lifts the Nasdaq with record earnings, but the rest of the market remains cautious amid rates, oil, and trade tensions. Which direction will markets take this week?
While Nvidia continues breaking records and boosting market sentiment, U.S. monetary policy and strategic moves in trade and energy reflect a globally cautious environment. Investors remain alert, but a clear direction has yet to emerge.
Nvidia stays strong and raises the AI ceiling
Nvidia once again surprised the market by reporting annual revenues of $130.5 billion—double those of the previous year. The main driver behind this growth was its data center division, which generated over $35 billion in the last quarter alone. Demand for AI chips shows no signs of slowing down, positioning Nvidia not only as a key Nasdaq player but also as a barometer of optimism across the tech sector. Its performance was so strong that the Nasdaq managed to soften weekly losses, thanks largely to Nvidia's momentum.
The Fed stays on the sidelines, but keeps watch
New York Fed President John Williams reaffirmed there's no rush to adjust interest rates. He said current policy is in “a good place” and that future moves will depend entirely on data. Although markets were hoping for clearer signals of a cut in the second half of the year, Williams opted for caution. This reinforces a more “patient” stance than expected, especially as inflation figures remain unconvincing.
Partial deal with China: relief or distraction?
The U.S. and China agreed to reduce tariffs for 90 days: Washington will lower duties to 30% on key products, while Beijing will reduce its tariffs to 10%. However, the Treasury Secretary made it clear this is not a final deal, but a temporary tactic. He even warned that maximum tariffs could be imposed on countries that don't negotiate “in good faith.” Analysts see this move more as a political play than a structural fix. Supply chains get a brief breather, but trade volatility remains high.
OPEC shifts tone: more oil production in June
After months of cuts, OPEC announced that eight member countries (including Saudi Arabia and Russia) will increase oil production by over 400,000 barrels per day starting in June. This decision comes at a time when oil prices have struggled to gain traction, and global demand is starting to show signs of weakening. While the move is meant to signal "confidence," the general perception is that OPEC is acting to avoid losing ground to independent producers.
Market closing
Major indexes ended the week with moderate losses, despite tech sector momentum:
S&P 500 (SPY): -0.65%, closing at $590.33
Dow Jones (DIA): -0.18%, closing at $425.79
Nasdaq (QQQ): -0.89%, closing at $516.85
Nvidia helped contain losses in the Nasdaq, but the broader market was more pessimistic—especially given the lack of clear signals from the Fed.
What’s next
This week brings key data: inflation, retail sales, and industrial production in the U.S. Any deviation in these metrics could reshape rate expectations, affect consumer confidence, and trigger immediate market reactions. The market needs a compass—but a clear direction is still missing.
Sources: Nvidia, Reuters, Financial Times, Enerdata
The opinions in the preceding commentary are as of the date of publication and are subject to change. Information has been obtained from third party sources we consider reliable, but we do not guarantee the facts cited are accurate or complete. This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict performance of any investment. We may execute transactions in securities that may not be consistent with the report’s conclusions. Investors should consult their financial advisor on the strategy best for them. Past performance is no guarantee of future results. For illustrative purposes only. Does not represent an investment recommendation. For more information, please see our Social Media Disclosure.