World stock markets experienced a notable surge on Thursday, buoyed by the positive earnings report from AI chip manufacturer Nvidia. The company’s revenue exceeded expectations, lifting investor sentiment and contributing to a broad market relief rally. European stocks, which had been in decline for five consecutive days, rallied as major indices returned to form, with the technology sector showing particular strength.
European tech indexes climbed by 1.8%, driven by gains from companies like Infineon and ASML, which saw increases of 2.8% each. Other significant players in the AI equipment sector, such as Schneider Electric and Siemens Energy, also posted strong gains. This rally follows Nvidia’s CEO Jensen Huang’s confident remarks dismissing concerns about an AI bubble, stating that demand for high-tech chips remains robust. Deutsche Bank strategist Jim Reid noted that Nvidia’s performance had revitalized market sentiment, at least temporarily dispelling fears of inflated AI valuations that had recently triggered a substantial $3 trillion drop in global markets.
Asian markets led the charge earlier in the day, with Tokyo’s Nikkei 225 closing up 2.6%. Meanwhile, South Korean stocks increased by 1.9%, and Taiwan’s market soared by 3.2%, propelled by significant gains from major chipmaker TSMC. Wall Street futures also showed positive trends, with Nasdaq and S&P 500 futures rising by 1.7% and 1.3%, respectively. This upturn followed a previous day where Wall Street managed to break a four-day losing streak, aided by rumors of potential delays in U.S. semiconductor tariffs aimed at easing trade tensions with China.
In the currency and bond markets, attention shifted to Japan, where the yen faced mounting pressure as speculation around a substantial fiscal stimulus package emerged. Japan’s Prime Minister Sanae Takaichi is reportedly preparing the country’s most significant stimulus initiative since the pandemic, prompting concern over the financing required. Consequently, Japanese government bonds saw a sharp sell-off, with yields reaching record highs and the yen weakening to its lowest point in ten months. This depreciation has been exacerbated by a loss of confidence in the government’s borrowing strategy.
Traders are also anticipating the release of a delayed jobs report from the U.S., which is expected to provide insights into the Federal Reserve’s monetary strategy. Minutes from the previous Fed meeting indicated a careful stance regarding interest rate cuts, citing risks related to inflation and public trust. Futures markets reflect a reducing probability of a rate cut at the upcoming December meeting, down from a previous 50% guess to about 33% following the delay of the jobs report to mid-December.
Additionally, movements in the currency markets saw the U.S. dollar index strengthen slightly, while the euro fell to $1.1520. In the commodities space, Brent crude oil ticked up to $63.6 per barrel, following a decline the day prior amid ongoing geopolitical considerations, including developments related to Ukraine and U.S. sanctions on Russian firms.
Meanwhile, cryptocurrencies showed resilience, with Bitcoin regaining some value, rising by 1.8%, alongside Ether, which was up 1.5%. Precious metals markets experienced volatility, with spot gold dipping slightly after an earlier rise.
As global markets react to these developments, the interplay between corporate earnings, fiscal policies, and economic data remains critical to shaping future investor sentiment and market dynamics.
