- UK markets set to open flat, lacking fresh catalysts
- US markets on track to hand back some of yesterday’s gains
- NVIDIA’s Jensen Huang touts $1 trillion revenue opportunity
- Oil bounces back with $100 per barrel acting as an anchor for now
- Gold hovers around month lows as rate cut hopes fade
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
FTSE 100 futures are pointing to a fairly flat open this morning, with little in the way of corporate news to give the market any real sense of direction. In the absence of company‑specific drivers, investor focus is firmly fixed on developments in the Middle East. For now, it’s geopolitics rather than earnings that look set to steer sentiment across UK equities, which means volatility should be expected.
US markets pushed higher overnight, but futures are pointing to a softer start this afternoon, with volatility still very much in the driver’s seat. Geopolitical tensions ramped up over the weekend as Trump looks to rally support for a coordinated plan to reopen the Strait of Hormuz, although there were tentative signs of de-escalation yesterday, with reports of direct US-Iran talks and oil settling just above $100 a barrel. But even if the Iran conflict comes to a swift resolution, ongoing concerns about stretched valuations and fresh warnings in private credit could keep US markets from breaking into a full-blown rally.
NVIDIA just told the market to think much, much bigger. Jensen Huang’s GTC keynote put a staggering $1 trillion revenue opportunity for 2025–2027 front and centre – implying at least $500bn in data centre revenue in 2027. As usual, Wall Street consensus is well below that number, having around 30% total revenue growth pencilled in for 2027. That needs to come closer to 45% to get anywhere near Jensen’s new guidance and push past 50% to match our numbers.
The other key message was strategic: NVIDIA isn’t a chipmaker, it’s positioning itself as the only company capable of building fully integrated, at‑scale AI factories. The integration of a new Groq chip addresses the inference challenge head-on, with the latest Vera Rubin system now combining seven chips across five rack-scale systems into one deeply integrated platform. The market may not have reacted much to this keynote, but we think it hit a lot of the right notes, and in our view, NVIDIA remains the number one way to play the AI theme.
Oil prices have bounced back from yesterday’s drop as investors weigh the growing impact of Middle East tensions on global supply. Iran has stepped up attacks on regional energy infrastructure, while most countries have so far stopped short of backing US President Donald Trump’s push to protect shipping through the Strait of Hormuz. Still, it does look as if $100 per barrel is the anchor for now, with prices kept somewhat in check by hopes that the vital waterway could reopen after several tankers passed through safely over the weekend, and by reports of back-channel talks between the US and Iran.
Gold edged higher to around $5,020 per ounce but is still hovering close to its lowest level in nearly a month, as investors weigh what the Middle East conflict could mean for inflation and interest rates. Elevated energy prices are keeping inflation worries alive, which in turn makes central banks less likely to rush into cutting rates. The Federal Reserve is expected to hold steady this week, with cuts still on the cards for later in the year. The UK rate outlook isn’t quite as attractive, with the Bank of England expected to hold rates steady before potential rate hikes in 2027.
The author and connected parties hold shares in Nvidia.
