(Bloomberg) — Technology stocks rebounded from Nvidia Corp.’s hasty selling after traders said the company’s results, which showed revenue doubled in the quarter, underscored the profitability of artificial intelligence.
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Nasdaq 100 index futures rose 0.3 percent after previously falling as much as 1.4 percent. S&P 500 contracts also rose and Germany’s DAX index hit a new record. Nvidia, whose share price fell sharply after the U.S. stock market closed, lost just 2 percent in premarket trading. Intel Corp., Apple Inc. and Microsoft Corp. all posted small gains.
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Nvidia, a stock that has powered the bull market this year with a rise of over 150%, has presented a mixed picture to investors. Expectations for the stock have been high following a string of stellar results, and the company has met or beat analyst estimates on almost every count. Revenue rose to $30 billion in the fiscal second quarter. The company said third-quarter revenue will be around $32.5 billion. While analysts had on average predicted $31.9 billion, estimates ranged as high as $37.9 billion.
“Basically, market participants are reflecting on Nvidia’s results and saying they were actually pretty good,” said Michael Brown, a senior strategist at Pepperstone Group Ltd. “The bar for beating expectations was impossibly high, so the results don’t derail the bull market for chipmakers or the stock market in general.”
The moves in U.S. markets signaled a rebound from late Wednesday, when the technology sector came under pressure after Nvidia’s revenue forecasts disappointed and the company signaled it was struggling with production of its new Blackwell chip. A $286 billion exchange-traded fund that tracks the Nasdaq 100 lost 1 percent in after-hours trading.
With earnings season coming to an end, the focus is turning back to the macroeconomic landscape. Money markets are betting that the Federal Reserve will cut interest rates by about a percentage point by year-end, but it remains uncertain whether policy will be eased by a quarter of a percentage point or 50 basis points next month.
The Fed’s preferred inflation indicator could underpin bets on how much and how quickly the central bank will ease policy. Annual and monthly core PCE readings are due out on Friday.
Yields on 10-year US Treasury notes and the dollar remained stable. West Texas Intermediate oil traded around $74.
“What investors are now expecting is further confirmation that the Federal Reserve will step in to help with a slowdown in economic momentum and make a series of substantive cuts,” said Brian O’Reilly, head of market strategy at Mediolanum International Funds.
Sentiment on European markets was boosted by Spanish inflation figures, which reinforced expectations of a European Central Bank rate cut in September. Bond yields fell across the board. The German DAX rose as much as 0.7 percent to reach 18,912.47 points, surpassing its previous high of May 15.
Important events this week:
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Consumer confidence in the Eurozone, Thursday
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US GDP, initial jobless claims, Thursday
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Fed President Raphael Bostic speaks on Thursday
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Unemployment in Japan, CPI Tokyo, industrial production, retail sales, Friday
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CPI and unemployment in the Eurozone, Friday
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Personal income, spending, PCE in the US; consumer sentiment, Friday
Some of the key market movements:
Shares
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S&P 500 futures rose 0.4% as of 6:40 a.m. New York time
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Nasdaq-100 futures rose 0.7 percent
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Futures on the Dow Jones Industrial Average rose 0.3 percent
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The Stoxx Europe 600 rose 0.6 percent
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The MSCI World Index remained little changed
Currencies
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The Bloomberg Dollar Spot Index remained little changed
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The euro fell 0.2 percent to 1.1095 dollars.
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The British pound remained virtually unchanged at 1.3190 dollars.
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The Japanese yen remained virtually unchanged at 144.55 per dollar.
Cryptocurrencies
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Bitcoin rose 0.5% to $59,632.43
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Ether remained almost unchanged at USD 2,539.29
Bonds
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The yield on 10-year government bonds remained almost unchanged at 3.83%
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The yield on German 10-year bonds fell by one basis point to 2.25 percent
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The yield on British 10-year bonds remained almost unchanged at 4.00%
Raw materials
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West Texas Intermediate crude oil rose 0.4 percent to $74.70 a barrel
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The spot price of gold rose 0.7 percent to $2,521.59 per ounce.
This story was created with the assistance of Bloomberg Automation.
– With support from Abhishek Vishnoi and Winnie Hsu.
(In an earlier version, the date of the PCE report was corrected.)
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