Stocks Rally As Nvidia Eases AI Bubble Concerns: Markets Wrap

Stocks rose and equity-index futures indicated further advances after robust earnings from Nvidia Corp. eased concerns about a bubble in the artificial intelligence industry.

Shares of Nvidia jumped over 5% in post-market trade after its revenue forecast beat estimates, helping lift other AI-related stocks. Contracts for the S&P 500 rose 1.2% and those for the Nasdaq 100 jumped 1.7%, as relief following Nvidia boosted risk assets after worries over AI froth roiled markets in the past week. Alphabet Inc. soared after a wave of glowing reviews for the newly released version of its Gemini AI model.

Asian shares also advanced with the Nikkei 225 surging 3.7% and South Korea’s Kospi — a poster child for the AI boom and one of this year’s top-performing markets — gaining 2.5%. Bitcoin rallied to trade above $92,000 as sentiment improved.

Elsewhere, the dollar broadly held its gains after posting its biggest advance since late September. Treasuries steadied after edging lower in the previous session as bets for an interest-rate reduction by the Federal Reserve eased amid a cloudy outlook on the labor market.

Nvidia’s strong results helped restore a tentative sense of calm after weeks of heavy selling in technology stocks, as investors grew uneasy about stretched valuations and fading prospects for near-term rate cuts. With sentiment still cautious and scrutiny of tech spending intensifying, how Nvidia’s earnings are interpreted will be crucial.

"Relief is probably the word," said Matthew Haupt, a portfolio manager at Wilson Asset Management in Sydney. “We needed a circuit breaker for the selloff in equity markets as sentiment was turning south and they delivered a great result,” Haupt added, referring to Nvidia’s earnings.

Another key focus for investors is the path ahead for interest rates. Traders are nearly pricing out a Fed rate cut next month as the Bureau of Labor Statistics won’t publish an October jobs report, but will incorporate the payrolls figures into the November data due after the Fed’s final meeting of 2025.

That leaves Fed officials without a key piece of economic data before their final meeting of the year. The announcement prompted traders to scale back expectations for a quarter-point reduction, with odds now heavily pointing to policymakers keeping the benchmark rate on hold at the 3.75% to 4% range.

"This information blackout is viewed as amplifying divisions within the Fed board and pushing them towards an ‘on hold’ decision at the December FOMC meeting," Tony Sycamore, a strategist at IG Markets, wrote in a note.

Minutes from the Fed’s October meeting showed many central bank officials said it would likely be appropriate to keep rates steady for the remainder of 2025. The document came out on the eve of the September jobs report.

The US 10-year yield rose one basis point to 4.15% Thursday.

"There’s no consensus at the Fed with policymakers flying blind, but these minutes lean hawkish overall," said David Russell at TradeStation.

Elsewhere, Japan’s Finance Minister Satsuki Katayama said she confirmed the need to monitor market movements with Bank of Japan Governor Kazuo Ueda and Growth Strategy Minister Minoru Kiuchi, as the officials reaffirmed a joint accord aimed at overcoming deflation and achieving sustainable growth.

Back to stocks, equities are steadying after a bruising run of losses that pushed a global gauge of stocks to the lowest in a month.

Wall Street executives have also urged caution, warning investors to brace for further losses. Goldman Sachs President John Waldron said Wednesday, "technicals are kind of more biased for more protection, and more downside.” Bob Diamond of Atlas Merchant Capital called the turmoil a “healthy correction."

With so much at stake, Nvidia’s earnings were critical for traders assessing the future of AI spending.

Nvidia said its sales will be about $65 billion in the fiscal fourth quarter, which runs through January. Analysts had estimated $62 billion on average, with some predictions ranging as high as $75 billion.

"Compute demand keeps accelerating," Chief Executive Officer Jensen Huang said in the statement. "AI is going everywhere, doing everything, all at once."

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 1.2% as of 9:38 a.m. Tokyo time

• Hang Seng futures were little changed

• Nikkei 225 futures (OSE) rose 3.5%

• Japan’s Topix rose 2.2%

• Australia’s S&P/ASX 200 rose 0.9%

• Euro Stoxx 50 futures rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1531

• The Japanese yen was little changed at 157.14 per dollar

• The offshore yuan was little changed at 7.1171 per dollar

• The Australian dollar rose 0.1% to $0.6485

Cryptocurrencies

• Bitcoin rose 1.9% to $92,186.48

• Ether rose 1.9% to $3,045.6

Bonds

• The yield on 10-year Treasuries was little changed at 4.14%

• Japan’s 10-year yield advanced three basis points to 1.795%

• Australia’s 10-year yield advanced six basis points to 4.48%

Commodities

• West Texas Intermediate crude rose 0.6% to $59.79 a barrel

• Spot gold rose 0.6% to $4,102.68 an ounce