Nvidia’s stock faced a decline of 2.59% yesterday and has now experienced a total drop of 7% for the month. This downtrend continued into the morning, with shares decreasing an additional 1.34%, primarily influenced by the news that Meta is considering leveraging Google’s chips to power its AI models. Despite this setback for Nvidia, traders appear to be turning their focus elsewhere, as a global stock rally has commenced.
The S&P 500 futures rose 0.29% in premarket trading, following a robust 0.91% increase in the previous session. Markets across both Asia and Europe demonstrated positive movement, and notably, tech stocks other than Nvidia maintained their momentum; the Nasdaq Composite index recorded a 0.58% rise yesterday.
Jim Reid and his team at Deutsche Bank highlighted the market’s optimistic atmosphere, noting a significant three-day advance for the S&P that has reached +3.47%—the strongest since the U.S.-China tariff reduction in May. This move leaves the index nearing its all-time high, with small-cap stocks like the Russell 2000 surging 2.14% and the equal-weighted S&P 500 up 1.45%.
Several key factors contribute to this positive sentiment in the markets. First, earnings reports from S&P 500 companies have exceeded expectations, with 95% of these firms revealing Q3 results that showcased an earnings per share (EPS) growth rate surpassing 13%, significantly better than the consensus forecast of 7.4%. Additionally, S&P 500 revenues rose by 8.4%, which is above the estimates at the end of the quarter.
The private credit market also reflects strong performance, as Lincoln International found that 68% of tracked companies reported revenue growth over the past year, while 62% noted an increase in adjusted earnings before interest, tax, depreciation, and amortization (Ebitda). On average, revenue grew by 6.5% for the year leading to Q3 2025, with Ebitda rising by 5.4%.
Investor fear, as indicated by the VIX index, has diminished, dropping 23.08% over the last week. This decline suggests that stock investors are becoming less apprehensive about an AI bubble impacting market stability. In a bullish move, JPMorgan has set a new end-of-2026 target for the S&P at 7,500, predicting above-trend earnings growth of 13-15% over the next two years.
The potential for an interest rate cut by the U.S. Federal Reserve in December adds to the optimism, with the CME’s Fedwatch tool currently suggesting an 84% likelihood of a reduction, which would introduce more accessible capital into the market.
Despite Nvidia’s struggles, which have cast a shadow over its stock—a still notable 32.41% increase year to date—the overall market sentiment remains strong.
As the markets prepare for the opening bell in New York, early indications show the following:
– S&P 500 futures up 0.29%, following a closing gain of 0.91%.
– STOXX Europe 600 up 0.45% in early trading.
– U.K.’s FTSE 100 rose by 0.25%.
– Japan’s Nikkei 225 increased by 1.85%.
– China’s CSI 300 up 0.61%.
– South Korea’s KOSPI surged by 2.67%.
– India’s NIFTY 50 showed an increase of 1.24%.
– Bitcoin trading at $86,000.
The market seems poised for a positive day, buoyed by strong earnings and a broad sense of optimism.
