Before the bell: Bessent Creates Uncertainty

Nvidia failed to meet expectations yesterday, causing U.S. tech stocks to slide lower. Investors are now looking ahead to the U.S. interest rate decision.

Investors hit the sell button again yesterday after U.S. Treasury Secretary Bessent stated that he could not guarantee the U.S. would avoid a recession. He also mentioned that there might be a transitional period during which the economy could temporarily cool down. Such statements worry investors. The S&P 500 lost 1.1%, while the tech-heavy Nasdaq (-1.7%) also turned red once again. The only sectors that managed to stay slightly positive in the U.S. were energy stocks and healthcare companies. Meanwhile, European stocks performed better, with the Euro Stoxx 50 gaining 0.7%. In Asia, the Hang Seng Index is trading flat this morning.

Later today, investors will be closely watching the U.S. interest rate decision at 7:00 PM Belgian time. The expectation is that the Federal Reserve will keep rates stable at a maximum of 4.5% without cutting them. UCB has reported positive research results for its experimental therapy for thymidine kinase 2 deficiency, a rare muscle disease. Among patients who developed symptoms before the age of 12, the risk of death was reduced by 87% to 95%. Meanwhile, biotech company Biotalys has announced that it has enough cash to last until May 2026. Today, all eyes are on the earnings report from Chinese gaming giant Tencent.

King Midas Loses His Touch

For a long time, Nvidia CEO Jensen Huang was seen as King Midas in investment circles—everything he touched turned to gold. Expectations were therefore high for his keynote speech at the GTC conference in California yesterday. Last year, his remarks triggered rallies in stocks like Dell and Synopsys. However, this year, Nvidia’s stock started declining during his speech. When he mentioned that Nvidia would help General Motors develop self-driving cars, GM’s stock also took a hit. Fundamentally, Nvidia remains strong, and the stock has become significantly cheaper, but investors are no longer convinced. With the uncertainty surrounding President Trump, it seems that King Midas has temporarily lost his golden touch.

Gold Shines Brighter Than Ever

Speaking of gold—its price hit a new record this morning, reaching 3,042 dollars per ounce. That marks a 16% increase this year and over 40% in the past 12 months. Concerns over geopolitical tensions, trade wars, and Europe’s freezing of Russian assets have driven gold prices significantly higher. Want to invest in gold? There are several ways to do so. On the Amsterdam Stock Exchange, you can buy the Invesco Physical Gold ETC, which tracks physical gold investments. Another option is the iShares Physical Gold ETC. Notably, gold mining stocks have lagged behind. Investors can gain exposure to these stocks through the VanEck Gold Miners ETF on the Paris Stock Exchange. Ideally, buying during a slight pullback is best—but in recent months, gold hasn’t seen any real dips. Maybe a speech from King Midas could change that?

Did You Know…

Warren Buffett’s investment holding is a safe haven during market downturns? While U.S. tech stocks have lost significant ground this year, Berkshire Hathaway has already gained 16% on the stock market.

This article was translated from Dutch and was originally published on Spaarvarkens.be.