Equities: Tech gains conceal broader market weakness - Deutsche Bank

Deutsche Bank strategists observed that Nvidia's post-earnings surge spurred a significant rally in technology stocks, driving the S&P 500 up 0.72% and the Nasdaq by 1.57%. However, market breadth was weak, with more than two-thirds of S&P 500 constituents declining, and every major sector except information technology falling. European equities also faced pressure due to higher energy prices and a weak performance of French banks.

Markets exhibited a mixed performance, with Nvidia's results bolstering AI optimism, contributing to the S&P 500's best day in three weeks (+0.72%). Despite this, equities showed divergence both domestically and in Europe. In the US, Nvidia's earnings were the primary driver, resulting in an 8.74% share price increase. The optimism around AI further helped other tech stocks, with the NASDAQ (+1.57%) and S&P 500 (+0.72%) close to record highs.

However, over two-thirds of the S&P 500 fell, and every major sector except information technology declined, while the equal-weighted S&P 500 dropped -0.29%. In Europe, the STOXX 600 (-0.69%) experienced its worst performance in a month, and the CAC 40 (-1.68%) saw a significant decline. Meanwhile, several other indices made gains, including the Nikkei (+0.75%), Hang Seng (+0.47%), and Shanghai Comp (+0.08%).

US equity futures remained unchanged, with the S&P 500 down just -0.04%. As for the future, Kevin Warsh, preparing to deliver his first Jackson Hole speech as Federal Reserve Chair, has sparked expectations beyond interest rate decisions, focusing on financial innovation's implications for payments and policy at the Jackson Hole symposium.