- FTSE 100 opens higher
- US markets gear up for earnings season
- NVIDIA hits $4 trillion with more to come
- Musk’s xAI delivers chart-topping new language model
- Bitcoin reaches new all-time high
- Oil hovers around $70 a barrel
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Investors have voted with their wallets, brushing aside tariff uncertainty to send risk-on assets higher. If all-time highs for NVIDIA and Bitcoin are anything to go by, markets seem to be pricing in very little chance of any meaningful disruption to the bull party, at least in the near term. US markets closed higher yesterday, and European stocks have joined in this morning, with the FTSE 100 trading up at the open.
US investors looked the other way as President Trump issued another wave of tariff letters. But uncertainty is still in the air, as investors gear up for an important earnings season in the coming weeks. So far, tariffs haven’t made a noticeable dent in inflation, but the real test is whether they’ll start to weigh on corporate earnings. Growth expectations have been falling all year, which could set the stage for upside surprises – if companies have managed to absorb tariff costs through productivity and efficiency gains. Still, futures point to a weaker open today, as this unloved bull market continues to wrestle with elevated volatility.
NVIDIA was the headline catcher, as the first company to hit the $4 trillion valuation mark. The key question is where it goes from here, and while it might seem strange for a company that’s just passed the $4 trillion mark, NVIDIA still looks attractive. Growth is expected to slow, and it’s likely to lose some market share as competition and custom solutions ramp up. But trading at a relatively modest 32 times expected earnings, and over 50% top-line growth forecast this year, there’s still an attractive opportunity ahead. For investors, it remains a compelling way to gain exposure to the AI boom – not just as a participant, but as one of its architects.
AI language models have a new king as Elon Musk’s xAI delivered the latest version of Grok. After Grok 3’s mini meltdown earlier in the week, the chart-topping launch of Grok 4 is testament to the team Musk has built – perhaps even more impressive is that xAI was late to the game to start with. This continued improvement in model performance signals broader implications for the AI transition, with far-reaching opportunities across the economy. For Tesla investors, it’s also a positive sign: proof that Musk continues to deliver on ambitious technical projects, even with one eye on politics.
It’s becoming harder for capital allocators to look the other way on Bitcoin as the so-called ‘digital gold’ reached a fresh all-time high. The debate rages on as to whether this is a good store of wealth or just a leveraged play on the broader market. Nevertheless, with around a 60% share of the estimated $3.4 trillion crypto market, whether to have an allocation to Bitcoin (or the developing crypto market more broadly) is starting to become a more difficult decision.
Oil markets are on edge as Trump’s new tariff threats add to recent pressure on copper and other imports, while a surprise 7.1-million-barrel crude stockpile build defied expectations. Still, strong demand for gasoline, tensions in the Red Sea, and upcoming OPEC+ supply increases (with the UAE highlighting steady inventories) are keeping prices somewhat supported.”
The author holds shares in NVIDIA and Tesla.
