U.S. Indexes closed higher on Wednesday as markets grew increasingly optimistic that the Middle East conflict may be approaching its final stages. President Trump said talks with Iran are in their final stages, while Al Hadath reported that the Pakistani Army Chief may visit Iran tomorrow to announce a final draft agreement, with the next round of negotiations expected to take place in Islamabad after the Hajj season (25th–30th May). Oil prices extended losses following the headlines, with WTI and Brent both falling by around USD 6/barrel. The decline in crude supported Treasuries and weighed on the Dollar against major peers. Energy was the worst-performing sector amid the sharp downside in oil, while Consumer Discretionary, Technology and Materials outperformed. Airlines were among the biggest gainers in the S&P 500 as lower fuel costs boosted sentiment (JETS +6.6%). Semiconductor (SMH +3.8%, SOXX +4.7%) and memory names (DRAM +3.5%) rallied ahead of Nvidia earnings, with many sell-side firms expecting a beat-and-raise quarter. Elsewhere, the FOMC Minutes leaned hawkish, with the majority viewing hikes as likely warranted should inflation remain persistent, although markets largely looked through the release. In supply, the US 20-year bond auction was broadly average and generated little market reaction. In FX, Antipodes outperformed while the Dollar lagged alongside lower oil prices and firmer Treasuries. Sterling also strengthened despite softer-than-expected UK CPI data as it benefitted from the risk environment and Dollar weakness. Precious metals benefited from the weaker Dollar backdrop. Looking ahead, focus remains firmly on Iran after reports suggested Tehran is reviewing a text sent by the US, following Iran’s own 14-point proposal delivered three days ago. The April FOMC Minutes leaned notably hawkish, although much of the tone was already signalled by recent Fed commentary and Powell’s latest press conference. The key takeaway was the growing support within the Committee for shifting away from an easing bias and the increasing willingness among officials to consider further tightening if inflation remains persistent. A majority of participants said additional policy firming would likely become appropriate should inflation continue to run above the Fed’s 2% target, while many participants said they would have preferred removing the easing bias language from the statement altogether. Policymakers also noted that elevated inflation and uncertainty surrounding the Middle East conflict could require rates to remain restrictive for longer than previously anticipated. Only several suggested it would likely be appropriate to lower rates once there are clear indications that disinflation is firmly back on track or if solid signs emerge of greater labour market weakness. Regarding inflation, participants warned that sustained high energy prices combined with tariffs could risk broader inflation pressures becoming embedded, although most still viewed longer-term inflation expectations as stable. On the labour market, most officials viewed conditions as stabilising, citing unemployment, hiring and layoff data, although some noted signs of underlying softness. Overall, the Minutes reinforced the Fed’s growing focus on upside inflation risks over downside labour market concerns. Fed Member Paulson said inflation remains too high, and that rate cuts are likely only appropriate once inflation is brought back under control, while reiterating that current policy is in an appropriate place. She added that it is healthy for markets to consider the possibility of an extended hold or even further hikes if inflation risks persist. Elsewhere, Paulson described the labour market as stable while noting consumption is slowing but remains resilient. The Philadelphia Fed President also warned that hikes may need to be considered if growth rises above potential or additional inflation risks emerge, while stressing that risks to both inflation and the broader outlook remain “super-elevated”. After the close we got the long awaited earnings from NVIDIA: NVIDIA delivered a record quarterly result, with revenue of $81.62B exceeding Wall Street’s $79.19B forecast and adjusted earnings per share of $1.87 coming in ahead of the $1.77 estimate. The figures underline the sustained pace of capital flowing into artificial intelligence infrastructure, with the company’s data centre division again doing the heavy lifting. Data centre revenue reached $75.2B in the first quarter, surpassing analyst expectations of $73.48B and reinforcing Nvidia’s position at the centre of the global AI buildout. The segment has become the dominant driver of the company’s financial profile, with hyperscalers and cloud providers continuing to absorb GPU capacity at a pace that shows little sign of moderation. The forward guidance was equally striking. Nvidia projected Q2 revenue of $91.0B, plus or minus 2%, translating to a range of $89.18B to $92.82B and clearing the consensus estimate of $87.36B by a meaningful margin. Adjusted operating expenses for the second quarter are expected to come in at approximately $8.3B, above the $7.93B estimate, suggesting the company is continuing to invest heavily in its cost base to sustain growth. Gross margins held firm. The Q1 adjusted gross margin of 75.0% was accompanied by Q2 guidance of 74.5% to 75.5%, indicating that pricing power across Nvidia’s product stack remains robust despite an increasingly competitive environment and ongoing questions around supply chain capacity. Beyond the operational numbers, management made two significant capital allocation announcements. The quarterly cash dividend was lifted to $0.25 per share from the prior $0.01, a 25-fold increase that signals considerable confidence in the company’s ability to generate cash. An additional $80B share buyback authorisation was also announced, providing a substantial return of capital mechanism for shareholders. Elsewhere, Oil closed flat while Gold ended the day with a 1.8% loss.
To mark my 3375th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 70 points yesterday and is now ahead by 1885 points for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 1.08% higher at a price of 7432.
The Dow Jones Industrial Average closed 645 points higher for a 1.31% gain at a price of 50.009.
The NASDAQ 100 closed 1.66% higher at a price of 29,297.
The Stoxx Europe 600 Index closed 1.51% higher.
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This Morning, the Nikkei closed 3.14% higher at a price of 61,684.
Currencies
The Bloomberg Dollar Spot Index closed 0.24% lower.
The Euro closed 0.26% higher at $1.1632.
The British Pound closed 0.33% higher at $1.3445.
The Japanese Yen rose 0.14% closing at $158.82.
Bonds
U.K.’s 10-Year Gilt closed 16 basis points lower at 4.99%.
Germany’s 10-Year Bund Yield closed 10 basis points lower at 3.09%
U.S.10 Year Treasury closed 8 basis points lower at 4.58%.
Commodities
West Texas Intermediate crude closed 5.72% lower at $98.19 a barrel.
Gold closed 1.42% higher at $4545.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Construction Output and Unit Labour Cost Index at 10.30 am. This is followed by U.S. Weekly Jobless Claims, Philly Fed Manufacturing Index, Building Permits and Housing Starts at 1.30 pm. Next, we have Manufacturing PMI at 2.45 pm and Euro-Zone Consumer Confidence at 3.00 pm. Finally, we have the Kansas City Fed Manufacturing Index at 4.00 pm and a speech from Fed Member Barkin at 5.20 pm.
Cash S&P 500
The S&P 500 closed Wednesday’s session higher by 1.08%, recovering losses from Monday and Tuesday, while oil prices swung significantly throughout the session. What is very clear is that oil remains highly susceptible to headline risk. While I do not have hard data to support it, it feels as though the magnitude of those headline-driven swings may be narrowing, perhaps reflected in the symmetrical triangle pattern that continues to develop. The only issue I have with the triangle is determining which oil price version to use, because contract rolls and the volatility around them make it difficult to maintain a clean, consistent pattern. The only notable thing, though, is that while the front-month contracts and CFDs are showing one picture, the December 2026 contracts are clearly in an uptrend. As I mentioned in my Economic commentary above, Nvidia reported results last night, and there were really no surprises when it came to the typical beat-and-raise numbers. There was not much of a surprise in the muted post-earnings move either. The road higher for Nvidia may become more challenging over the next few days. There were a significant number of calls priced above $230 that are likely to see a substantial amount of premium burned off tomorrow, which could release dealer flows. I guess the bottom line is that if Nvidia cannot clear those resistance levels at $230 and beyond, I would not be surprised to see the stock drift back into the $195 to $200 range. With Nvidia now behind us, we should be reaching the point in the cycle where dispersion really starts to unwind. I just do not see why it should not. Index-level volatility has hardly moved over the past few weeks, while single-stock volatility remains incredibly high. That has left market dispersion very stretched and, at this point, likely a crowded trade. The spread between the VIXEQ, which measures constituent volatility, and the VIX, which measures index volatility, is around 25, which is historically near the widest end of its range. It would be surprising to see that spread widen much further from here. That is not to say it cannot get wider, but I would be very surprised if it did. At this point, realised dispersion by sector remains extremely lopsided, with XLK outperforming the S&P 500 by 15.4 percentage points, while every other sector continues to underperform the Index. On a five-year lookback, we are still essentially in fantasy land — around the 1st percentile. At some point, something will have to give, and Nvidia’s results seem to me to be a good resetting point. I keep waiting for a trigger for the S&P and NDX to sell-off. When doing my research last night for today I came across the following:
Every crash starts with concentration.
Every recovery starts with rotation.
Every regime ends when the data confirms it.
The top 10 names now hold 35.6 percent of the S&P 500.
The last time concentration printed like this, the Index needed a decade to recover.
A model lets you exit before the headlines do.
Save this for your next portfolio review.
The S&P has an ‘Open Gap’ from two weeks ago from 7257/7294. I will use any tag of the gap to close my 7097 average short position and reassess if triggered. I have never seen so may ‘Open Gaps’ in both the S&P and NDX. As we know all Gaps eventually get filled and we have to patient as we wait for the move lower to commence. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
I am still long the Euro from last Friday at 1.1620 with the same 1.1680 T/P level. I will add to this position at 1.1540 while leaving my ‘Closing Stop’ unchanged at 1.1475. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: The Dollar has short-term resistance from 100.00/100.80 where I will be a seller with a tight 101.50 ‘Closing Stop’. If I am taken short, I will have a T/P level at 99.30. The Dollar has support below from 98.10/98.80 where I will again be a buyer with a 97.55 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.50. If any of these views change, I will be back with a new update for my Platinum Members.
Russell 2000
Despite the Russell leading Wednesday’s rally with a 2.6% gain I am still flat as the market fell shy of yesterday’s sell range. Ahead of the weekend I will continue to be a seller from 2830/2900 with the same 2955 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2770. Given how overbought the Russell is trading I still do not want to be long the market at this time.
FTSE 100
My latest long 10250 FTSE position worked well as the market traded higher to my 10320 T/P level and I am now flat. Gilt Yields falling 16 basis points helped the FTSE to close over 10400. The FTSE has short-term support below from 10200/10280 where I will again be a buyer with the same 10095 wider ‘Closing Stop’. If I am taken long I will have a T/P level at 10350. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow surged yesterday, never coming close to my buy range and I am still flat. As I mentioned earlier in the week the Dow cannot close above 50170 or my negative divergence theme will be null and void. As a result, todays and Friday’s trading sessions will be key for the Dow. With the Dow still trading below its February all-time high the chances are that the Dow will soon pay catch up with the S&P and NDX with the key question will it be sustained. TBD. Today, I will raise my buy level to 49150/49450 with a higher 48795 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49780. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX surged yesterday, eventually hitting my sell range for a now 29200 short position. I will only add to this trade at 29430 while leaving my 29605 ‘Closing Stop’ unchanged. I will now raise my T/P level to 28960. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Lower Bund Yields saw the Bund rally over 100 points yesterday. I am still flat. I will now raise my buy level to 123.50/124.30 with a higher 122.85 ‘Closing Stop’ If I am taken long, I will have a T/P level at 124.90.
Gold Rolling Contract
I am still flat. I will not chase the price of Gold higher as I continue to be a buyer on any dip lower to 4320/4420 with the same 4195 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4590 If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver continues to trade heavy and I am still flat. Silver has short-term support below from 70.50/73.50 where I will be an aggressive buyer with the same 67.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 76.10.
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