Global stock markets rebounded on Thursday as Nvidia’s blockbuster earnings eased fears of an AI bubble, fueling hopes for a year-end Santa rally.
Key Takeaways
- Nvidia reported $57 billion Q3 revenue, beating expectations
- Company forecasts $65 billion revenue for current quarter
- FTSE 100 gained 0.6% after recent 4% decline
- European and Asian markets followed the positive trend
Chip giant Nvidia’s CEO Jensen Huang directly addressed bubble concerns, stating: ‘There has been a lot of talk about an AI bubble. From our vantage point we see something very different.’ The $4.5 trillion market cap company’s strong performance has revived investor confidence.
Market Reaction Across Regions
The FTSE 100 opened 0.6% higher, led by tech-focused investment trusts Polar Capital Technology and Scottish Mortgage. Nvidia represents significant portions of both portfolios – 10.9% of Polar Capital and 3.3% of Scottish Mortgage.
European markets showed strong gains with stocks up 1.2%, while France’s CAC and Germany’s Dax added 1.2% and 1% respectively. In Asia, Japan’s Nikkei 225 led with a 2.7% surge.
US markets are poised for strong openings, with futures indicating 1.8% growth for Nasdaq and 1.2% for S&P 500.
Expert Analysis
Ben Barringer, head of technology research at Quilter Cheviot, called Nvidia’s earnings ‘just what the market wanted after a nervous couple of weeks.’ He noted that ‘investment markets may just see a Santa rally in December after all.’
However, Capital.com’s Kyle Rodda cautioned that AI valuation concerns represent only one part of the story affecting markets. He highlighted Federal Reserve rate uncertainty as the other key factor, with FOMC minutes revealing committee divisions about future US interest rate moves.
Traders have reduced expectations for a December rate cut, with implied probabilities falling to 33%. Markets now await the delayed September US jobs report for clearer signals about potential rate adjustments.
