Stocks lose steam as Nvidia optimism fades, dollar steady
By Herbert Lash and Huw Jones
NEW YORK/LONDON (Reuters) -A gauge of global equity markets lost steam on Friday after setting a new intraday high as optimism over Nvidia (NASDAQ:NVDA)'s results faded while the dollar index was steady as Federal Reserve officials indicated rate cuts will come later than expected.
Wall Street's main indexes earlier extended gains as Nvidia shot above $2 trillion in market value for the first time, driven by the AI frenzy that has gripped markets since the chipmaker's blockbuster quarterly report two days earlier.
Nvidia later traded little changed, last up about 1%.
Equity markets also advanced after data showed U.S. services sector growth picked up in January as new orders increased and employment rebounded, though a measure of input prices rising to an 11-month high.
MSCI's all-country world index, a gauge of stock performance worldwide, was up 0.14% after earlier shooting to a new high.
The combination of strong growth and inflation not yet slowing to the Fed's 2% target has led Fed officials to push back on rate cut expectations.
Fed funds futures show a 52.3% chance of a cut in June, with a 34.7% probability of no cut, a sharp reversal from bets on Feb. 1 of a 62% chance of a cut in March, according to CME Group's (NASDAQ:CME) FedWatch Tool.
«When you look at the speeches that we've gotten over the last two days here from the Fed, they want to be very clear that they have inflation down to their goal,» said Stan Shipley, fixed-income strategist at Evercore ISI in New York.
«Since the economy is so strong, they see no reason why should they cut rates until they are sure,» he said.
The pan-European STOXX 600 index rose 0.37%, on track for its fifth straight week of gains and a new
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