Inflation Falls, Nvidia Surprises, and Market Fears Shift

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Japan’s Inflation Cools Slower than Expected, Still Rising

Key Data Points:

  • Japan’s inflation slowed to 2.5% in April, marking a second consecutive month of decline.
  • Core inflation, excluding fresh food, decelerated to 2.2%.
  • The “core-core” inflation rate, excluding fresh food and energy, saw a sharper fall to 2.4%.

Despite the modest slowdown, inflation remains above the Bank of Japan’s target of 2%. The central bank is expected to keep interest rates at ultra-low levels to support economic growth during geopolitical uncertainties.

Alternative Nvidia Investments: A Way to Tap Into AI

After Nvidia’s impressive earnings report, Nancy Tengler of Laffer Tengler Investments suggests exploring other options to invest in the AI theme. While Nvidia has been a dominant player, Tengler believes there are “another way to play this.”

CNBC Pro subscribers can access exclusive insights on potential alternative investments in the AI space.

Market Downgrades Rate Cut Expectations to Just One

Trader sentiment is shifting towards a more conservative outlook, anticipating only one rate cut from the Federal Reserve this year. The market had previously priced in two reductions, but recent comments from Fed policymakers expressing concerns over inflation have dampened expectations.

The first rate cut is now projected to occur in September or November, a significant delay from the initial March forecast.

Geopolitical Risks Loom Over Market Landscape

As the first-quarter earnings season concludes, investors are preparing for a period of elevated geopolitical uncertainty in the coming months. Potential triggers include elections and ongoing conflicts.

According to Melissa Brown of SimCorp, geopolitical factors will play a greater role in market sentiment in the near term. Investors may postpone commitments until there is more clarity on the outcomes of significant events.

AI and Semiconductor Stocks Surge on Nvidia’s Optimism

The strong outlook provided by Nvidia has sparked a rally in AI and semiconductor stocks. Investors are betting on continued growth in these sectors as Nvidia’s success indicates a robust demand for AI-driven technologies and solutions.

[Inline Image: Graph showcasing the slowdown in Japan’s inflation rates]

Data sourced from: cnbc.com