Canada cuts interest rates, Nvidia hits new record high ahead of stock split and Hewlett Packard rides AI boom

“Chop, chop, chop – that’s the sound of another central bank taking the axe to interest rates. The Bank of Canada’s first rate cut in four years is a significant event and puts it in the same pool as Switzerland and Sweden in starting to loosen monetary policy,” says Dan Coatsworth, Investment Analyst at AJ Bell.

“While that creates the type of backdrop many investors want to see, tomorrow’s ECB rate decision is far more important as far as markets are concerned.

“The ECB is expected to be the first of the core trio – Europe, the UK and the US – to cut rates following the post-pandemic, inflation-fuelled surge in borrowing costs. The market already expects a 25-basis point reduction to stimulate more economic activity in the Eurozone, but that event coming true could still be a major catalyst to improve investor sentiment.

“The FTSE 100 had a see-saw session but managed to close the day 0.3% higher. Miners and banks did their best to draw in the storm clouds but they only mustered up a light drizzle rather than a proper soaking. Pharma giants AstraZeneca and GSK came to the rescue and kept the blue-chip index in positive territory.

“B&M shares slid 7% despite a confident tone in its results. Investors are concerned about slowing growth and lots of questions were asked as to why the retailer was light on detail about current trading trends in its results. Investors don’t like to be kept guessing and the absence of information implied that B&M was trying to brush any troubles under the carpet for now.”

Hewlett Packard / Nvidia

“Having released bumper results after last night’s market close, Hewlett Packard saw its shares fly as US markets opened for trading on Wednesday. The technology firm jumped by 12% after strong demand for its AI servers put it in a sweet spot.

“Investors continue to seek new ways to play the red-hot AI theme and week after week they are finding more companies that are reaping the benefits of this modern tech revolution. In Hewlett Packard’s case, it also helps that it is keeping a lid on costs and free cash flow has been better than expected. Bundle up all these pieces of good news and it’s no wonder the shares are on fire.

“The fact Hewlett Packard uses Nvidia technology for its AI offerings also helped to put a rocket under the chip giant’s share price as once again we have further proof that the AI theme is alive and well. Nvidia shares hit a new record high, just shy of $1,200, and took the Nasdaq index along for the ride.

“Tomorrow is a big day for Nvidia as those holding stock at the market close will qualify for nine additional shares in the chip group for each share already owned. Nvidia is undertaking a stock split to bring its share price down and make it more affordable to investors who cannot afford to splash out more than a grand per share, as well as to benefit employees who use some of their monthly pay packet to invest in the company.”

These articles are for information purposes only and are not a personal recommendation or advice.