Volkswacht Bodensee - Profit-taking nibbles at Nvidia and stocks rally loses steam

The Dow, S&P 500 and Nasdaq Composite all hit new highs during morning trading, but the Nasdaq then fell back into the red as shares in Nvidia and other tech stocks succumbed to profit-taking.

In Europe, London, Frankfurt and Paris all ended the day higher, with the DAX and CAC indices again setting intra-day and closing records.

Most Asian shares climbed, following a day of record highs in Japanese, US and eurozone markets on Thursday. But Tokyo was closed for a public holiday, one day after the Nikkei 225's record finish.

Oil prices sank however on demand fears after Federal Reserve policymakers appeared to commit the US central bank to higher-for-longer interest rates.

And the price of natural gas in Europe fell to a nearly three-year low, dampening inflation fears, as mild winter weather continues and stockpiles hold up.

- AI bandwagon -

"The focus of financial markets in the last 48 hours has been Nvidia's earnings report and its upbeat commentary about the future take-up of AI," said XTB analyst Kathleen Brooks.

"Nvidia's market capitalisation gained $277 billion on Thursday alone, the biggest one-day increase in market cap ever."

Markets celebrated Thursday as Nvidia helped push Tokyo's benchmark index past a record high set in 1989, and the euphoria spilled over onto Wall Street, with the blue-chip Dow lodging its first close above 39,000 points.

"The emergence of AI as a huge new source of investment and growth has come at a particularly advantageous time, enabling a continued push into record highs despite an unwelcome environment of tight monetary policy in the face of global inflationary pressures," said Scope Markets analyst Joshua Mahony.

On Friday, Nvidia shares rose more than three percent at the opening bell. That added to the 16.4 percent from the previous day's trading that lifted its market value to almost $2 trillion as investors cheered quarterly profits hitting $12.3 billion on record-high revenue.

But profit-taking briefly took Nividia shares lower in morning trading before they rebounded.

Other tech giants, including Facebook owner Meta, Amazon and Microsoft -- among Nvidia's largest customers -- also saw gains on Thursday and then stumbled in Friday morning trading.

Investors also digested the outlook for US interest rates.

On Thursday, three Fed officials signalled that interest rate cuts would more than likely come later this year, with one suggesting he wanted to see "at least another couple more months of inflation data" before deciding when to start lowering rates.

"Oil prices dipped... as the market absorbed the Fed's commitment to prolonging higher interest rates," said ActivTrades analyst Ricardo Evangelista.

"The surprising resilience of the US economy, evident in the latest data, provides the Fed with greater leeway to sustain its restrictive monetary policy for an extended period.

"This dynamic constrains economic growth and suggests reduced future oil demand, contributing to the price decline," he said.

- Key figures around 1630 GMT -

New York - Dow: UP 0.3 percent at 39,203.62 points

New York - S&P 500: UP less than 0.1 percent at 5,090.88

New York - Nasdaq Composite: DOWN 0.2 percent at 16,002.75

London - FTSE 100: UP 0.3 percent at 7,706.28 (close)

Frankfurt - DAX: UP 0.3 percent at 17,419.33 (close)

Paris - CAC 40: UP 0.7 percent at 7,966.68 (close)

EURO STOXX 50: UP 0.4 percent at 4,872.57 (close)

Tokyo - Nikkei 225: Closed for holiday

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 16,725.86 (close)

Shanghai - Composite: UP 0.6 percent at 3,004.88 (close)

Euro/dollar: UP at $1.0824 from $1.0823 on Thursday

Dollar/yen: DOWN at 150.34 yen from 150.53 yen

Pound/dollar: UP at $1.2672 from $1.2660

Euro/pound: DOWN at 85.40 pence from 85.48 pence

West Texas Intermediate: DOWN 1.8 percent at $77.23 per barrel

Brent North Sea Crude: DOWN 1.6 percent at $82.32 per barrel

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E.Gasser--VB