Daily market update: Nvidia, Vodafone, Watches of Switzerland, M&S

It’s quite remarkable to think investors were showing signs of panic less than a week ago, and now markets are merrily pushing higher as if there’s nothing to worry about.

US tech stocks bounced back sharply on Monday, and European and Asian markets were all solid on Tuesday in response. A further pullback in oil prices certainly helped to lift the market mood, with Brent crude trading 1.8% lower at $90.92 per barrel.

Markets are increasingly taking the view that Donald Trump needs to forge a new path if he wants to save face from the midterm election washout, and that might mean finding a way to end the Iran war. In doing so, he would, in theory, help bring down energy costs which would bring relief to consumers and businesses.

Nvidia’s shares traded 1% higher in pre-market trading despite Trump saying the FBI is looking into CEO Jensen Huang’s involvement with an alleged Chinese spy. Certain investors might have taken the view that whatever happens to Jensen Huang, the company will continue to dominate the AI chip space.

Vodafone

Vodafone guiding for full-year earnings and revenue at the top end of guidance is a signal of the continuing recovery in the business under chief executive Margherita Della Valle. But problems in its core German market were static on the line for investors as it announced first-half results.

Organic service revenue in Germany dropped as the company faces intense competitive pressures, and there was a significant write down in the value of this business which hit group statutory profit.

The company is having its feet held to the fire by Xavier Niel, the French telecoms magnate, who has built a sizeable stake in Vodafone. It has responded by cutting jobs and simplifying processes in its German operations.

Della Valle’s big decisions since taking over as CEO – including ditching its Italian and Spanish businesses and combining its UK operations with Three – have largely been vindicated.

However, Niel’s presence on the shareholder register is likely to keep the pressure on, with the continuing struggles in Germany the next big hurdle to overcome.

Della Valle’s record since taking charge at the beginning of 2023, delivering a total return of more than 62% over that time, provides shareholders with some confidence that she is up to the challenge.

Watches of Switzerland

There have been cracks in the artifice of the luxury sector in 2026 as its supposed immunity to ups and downs in the economy have been brought into question.

In this context, the latest results from Watches of Switzerland are robust. Unlike some luxury names, the company has limited exposure to the Middle East, and it is seeing robust demand for luxury watches and jewellery on both sides of the Atlantic.

This suggests demand for high end timepieces and jewellery might be more resilient in an uncertain consumer environment than other categories of luxury goods.

US sales growth is boosted by the acquisition of Texan outfit Deutsch & Deutsch, which completed at the beginning of this year, while UK sales are also expanding meaningfully.

The narrowing upwards of full-year guidance and slightly better-than-anticipated first-half performance helped the shares tick higher. Perhaps more significant for the long-term prospects of the group is the drastic reduction in net debt and significantly improved cash flow and margin performance.

This puts the business in a better position to stand the test of time as it navigates a tricky economic backdrop.

Marks & Spencer

Dan Coatsworth, Head of Markets at AJ Bell, comments:

Marks & Spencer shareholders should be jumping for joy at the news it is doubling the full-year dividend. This sends a strong signal to the market that the business is in a strong shape financially, and able to both invest for growth and give something back to investors.

The retailer has held restraint on dividends since 2023, and the prior three years it paid nothing at all. The business has come on leaps and bounds since then, with strategic developments across the food and clothing lines, and with operational efficiencies. It recently said there was more to be done behind the scenes, but it is clear the direction of travel is positive.

Despite M&S being a longstanding name on the UK high street, the business sees considerable growth opportunities. A goal to double food sales ‘over time’ will need more people to treat M&S as the go-to place for their weekly shop, rather than just a treat.

A successful pivot to offer select food products at value prices certainly helps grease the wheels, yet M&S will need to be careful not to simply open massive stores in the hope people will switch baskets for trolleys and assume they fill them to the brim.

M&S needs to avoid diluting the magic by expanding its product range to attract all and sundry, as that could simply see it become a carbon copy of Tesco or Waitrose. M&S offers something unique in the market, both in terms of the quality of products and the in-store experience. It needs to preserve that aesthetic to stay on top.

The fashion, home and beauty operations have a big opportunity for growth, particularly with the online channel. Yet this is a highly competitive market, and success depends on staying abreast of style shifts, and making sure it gets the balance right on inventory. Stock too much and it risks having lots of unsold items, but stock too little and customers get annoyed and go elsewhere.

Using the franchise model is a cost-effective way to expand overseas operations. It just needs to keep a close eye that franchisees are towing the line and upholding quality standards and not doing anything to risk damaging its brand reputation.

The lacklustre share price reaction to the growth strategy update possibly reflects M&S’s clear signal that it will still have to spend money today to make money tomorrow. It might also be down to investors sitting tight until they get more detail on how M&S plans to achieve its growth ambitions.