Nasdaq Futures Up 1.6% as Nvidia Drives Tech Rally:
Nvidia gains 23% in early US trading after blowout results
Fitch Ratings warns that the US’s AAA rating is under threat.
Nasdaq futures rallied and chipmakers soared as a bullish sales forecast from Nvidia Corp. ignited gains in companies linked to the frenzy for artificial intelligence.
Nvidia shares soared 23% in US premarket trading after its forecast for surging revenue surprised even the most optimistic analysts on Wall Street, propelling the company to the cusp of a $1 trillion market value. Contracts on the Nasdaq 100 added 1.6% and chipmaker ASM International NV led gains in the Stoxx 600 Index.
If the premarket gain holds, Nvidia’s value would rise by about $180 billion, ranking among the biggest one-day pops in history. The company, whose shares have doubled this year, is at the forefront of an explosion in spending on artificial intelligence computing following the success of ChatGPT and other tools.
It’s another sign that investors are willing to pile into promising tech stocks, despite the growing worries about China’s economy and a potentially catastrophic US debt default. Fitch Ratings warned that the US’s AAA rating is under threat, though it still expect politicians will reach an agreement before time runs out.
Treasury yields were steady on Wednesday, with yields on the two-year and 10-year note holding near the highest since mid-March.
Outside of chipmakers, markets were broadly weaker and selling intensified in Hong Kong, with the Hang Seng Index shedding 2.1%. The CSI 300 Index has given up about half its gains from the so-called reopening trade that started in November. The yuan is signaling an economy in distress after breaking through the closely-watched 7-per-dollar level.
The worry for investors is that China’s economy is losing momentum and there are persistant financial troubles in the real estate industry. Recent data suggest gross domestic product growth this year will be closer to the government’s target of about 5%, contrary to expectations of a large overshoot formed earlier in the year.
Key events this week:
- US initial jobless claims, GDP, Thursday
- Interest rate decisions in Turkey, South Africa, Indonesia, South Korea, Thursday
- Tokyo CPI, Friday
- US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Source: Bloomberg.com