(Bloomberg) — U.S. stock futures rebounded after Nvidia Inc. reported strong earnings after the New York close, stoking optimism about a global artificial intelligence boom.
Most Read Stories on Bloomberg
The company reported second-quarter revenue of about $28 billion, beating analysts’ expectations. It also announced a 1-for-10 stock split and raised its quarterly dividend by 150%, to 10 cents a share. Nvidia’s shares rose 7% in after-hours trading following the results, and futures for the S&P 500 and Nasdaq 100 both rose. The dollar was little changed in Asia after three straight days of gains.
A gauge of Asian chipmakers rose to its highest since February 2021, led by Nvidia’s earnings.
“The company once again stepped up and delivered in the face of high expectations,” said Carson Group’s Ryan Detrick, highlighting strong data center revenues.
Asian shares were mixed, with indexes in Australia, China and Hong Kong falling while Japan’s index rose. South Korean shares reversed early losses after central bank Governor Lee Chang-yong said the chances of raising interest rates were limited for now. The Bank of Korea kept its key interest rate unchanged after its policy meeting.
China shares were the region’s biggest drag, with technology stocks leading the decline. A flaring price war between Alibaba Group and Tencent Holdings over cloud services led Hong Kong-listed tech shares to fall.
Read more: Nvidia paves the way for further gains in AI stocks
Asian government bonds were little changed after falling on Wednesday. The yield on the policy-sensitive two-year Treasury note rose 4 basis points in New York after Federal Reserve officials continued to show they are in no rush to cut interest rates.
“Many” Fed officials expressed uncertainty about the extent to which their policies are restraining the economy, but the minutes also noted that the policies “are considered restrictive.”
“We felt that the signal from the FOMC strengthening the likelihood of higher long-term interest rates was negative for most Asian currencies and therefore for capital markets,” said Xin Yao Ng, investment director at Abdon. “It’s a currency effect.”
In currencies, indicators of the dollar’s strength maintained gains from Wednesday, when it hit a one-week high. The yen was little changed against the dollar after falling to its lowest level since late April. The People’s Bank of China has lowered the renminbi’s fixed interest rate to its lowest level since January.
The New Zealand dollar rose after Reserve Bank Governor Adrian Orr said the central bank wanted to avoid the risk of exploding inflation expectations.
technology profit
U.S. tech companies’ profits were among the strongest of the first-quarter earnings season, with the sector’s earnings revisions outpacing the rest of the market. But Solita Marcelli of UBS Global Wealth Management said the earnings results also signaled market expansion.
“We are constructive on AI trends and continue to favor large technology companies given their favorable market position,” she said. “We forecast global technology revenues to grow 20% and 16% this year and next, respectively, led by the semiconductor sector, where we see investment opportunities.”
In Asia, South Korea announced a $19 billion incentive package to bolster its semiconductor industry, a big boon for Samsung Electronics and SK Hynix, which remain leaders in an increasingly competitive industry.
Gold prices fell for a second straight day after dropping 1.7% on Wednesday following the Fed minutes. West Texas Intermediate also fell and is on track for a fourth straight day of declines. Copper prices fell on signs of weakening demand.
This week’s main events:
-
Eurozone S&P Global Services and Manufacturing PMI, Consumer Confidence, Thursday
-
G7 Financial Meeting, May 23-25
-
U.S. new home sales, initial jobless claims Thursday
-
Fed’s Rafael Bostic speaks Thursday
-
US Durable Goods, Consumer Sentiment, Friday
-
Fed’s Christopher Waller speaks on Friday
Some of the key market developments:
stock
-
S&P 500 futures were up 0.6% as of 12:08 p.m. Tokyo time.
-
Nasdaq 100 futures up 0.9%
-
Japan’s TOPIX rose 0.4%
-
Australia’s S&P/ASX 200 falls 0.5%
-
Hong Kong’s Hang Seng Index fell 1.4%
-
The Shanghai Composite fell 0.8%.
-
Euro Stoxx 50 futures up 0.3%
currency
-
The Bloomberg Dollar Spot Index was little changed.
-
The euro was little changed at $1.0829
-
The Japanese yen remained almost unchanged at 156.77 yen to the dollar.
-
The offshore yuan was little changed at 7.2536 yuan per dollar.
cryptocurrency
-
Bitcoin remains unchanged at $69,434.88
-
Ether rose 0.6% to $3,769.09
bond
merchandise
-
West Texas Intermediate crude fell 0.6% to $77.07 a barrel.
-
Spot gold fell 0.3% to $2,370.88 per ounce.
This story was produced in partnership with Bloomberg Automation.
–With assistance from Zhu Lin.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
