Originally published at: This week in charts: NVIDIA under the spotlight – InvestEngine Insights
The biggest market story this week? NVIDIA’s earnings report. As the world’s second-largest stock and widely-followed barometer for the health of the AI industry, its results were seen as a key test of whether the AI rally could be sustained.
The market’s initial reaction to the results was positive, with the company’s profits and revenues both increasing by around 80% compared to a year ago. This was ahead of analyst expectations, and the stock initially rose on the news.
However, the market later had second thoughts. Having been given more time to digest the earnings report, investors decided they had actually expected better, and NVIDIA fell over 8% on Thursday. This pulled the rest of the Magnificent 7 stocks, and the wider market, down with it. An index tracking the Magnificent 7 has now officially entered “correction” territory (down more than 10% from its high), though it’s still a few percentage points off from “bear market” status (a 20% drop).
Adding to the nervousness in markets this week was news that Trump confirmed the 25% Mexico and Canada tariffs would be coming into effect on 4th March, with an extra 10% on Chinese imports, as well as possible tariffs on Europe. The market is not taking the impact of these tariffs lightly, given the US imports almost $120bn a month from China, Mexico, and Canada combined.
This week’s selloff in the US market deepens the US’ underperformance relative to other global markets so far this year. While the US enjoyed stellar returns in 2023 and 2024, it’s so far off to an underwhelming 2025, with sterling investors now seeing negative returns for the US this year. Europe, by contrast, is enjoying its time in the sun, with year-to-date returns of over 10% – buoyed by a lack of confirmed tariffs and the prospect of easing tensions between Russia and Ukraine:
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