Tech Stocks Rally on AI Optimism as Nvidia Jumps: Markets Wrap

(Bloomberg) — US stocks advanced as a bullish outlook from Nvidia Corp. bolstered confidence that the rapid expansion in artificial-intelligence spending is likely to run for longer.

Nasdaq 100 contracts rallied 1.1%, while S&P 500 futures rose 0.5%. Nvidia jumped 6.5% in early trading after issuing a revenue growth forecast for fiscal 2028 far above expectations. Salesforce Inc. surged 10% as the software firm’s outlook reassured investors it can compete successfully in the AI era.

A $31 billion venture between Kioxia Holdings Corp. and Sandisk Corp. to ratchet up flash memory production added to the buoyant tone in technology stocks.

Treasuries fell modestly, with 10-year yields up two basis points to 4.67%. The dollar was little changed, while gold hovered near $4,600 an ounce.

Nvidia’s upbeat outlook offered relief to investors concerned about a bubble in the AI economy as Chief Executive Officer Jensen Huang said demand for its artificial-intelligence accelerators continues to expand. The chips are key components for training and running AI models.

Earnings growth from core tech names “is crucial given this is the main driver for US markets, and tech investment is the main driver for US growth,” said Geoff Yu at BNY. However, “with strong growth comes the risk of tighter monetary policy, which for now is also the market’s base case.”

Nvidia’s results showed that the AI cycle is primarily constrained by physical bottlenecks such as memory and power, rather than a shortage of end demand, said Amanda Lyons, head of research at Energy Group Capital.

“It effectively pushes the cyclical question further out and, crucially, gives investors permission to extend the earnings-growth runway not just for Nvidia, but across the second- and third-order beneficiaries of the AI buildout,” she said.

Still, some pockets of weakness tempered Thursday’s optimism. Europe’s Stoxx 600 fell as a retreat in consumer stocks outweighed the gains in the technology sector. HP Inc. tumbled as investors worried about demand for the company’s computers and printers. Wheat prices hit the highest since July 2023, keeping inflation concerns in focus alongside still-elevated energy prices.

Attention will now turn to the Jackson Hole Economic Symposium. Kevin Warsh will deliver his first major speech as Fed chair on Friday, giving investors fresh clues on the policy outlook after he faced criticism over a lack of clarity about his views on the economy.

“The market wants a little bit more hawkishness because you have seen some pretty strong numbers coming out on growth and inflation, pointing more toward higher rather than lower rates,” said Caspar Rock at Schroders Wealth Management. “More clarity should give a bit more confidence, and that might perk up the dollar rather than fixed interest markets.”

Corporate News:

Royal Bank of Canada beat estimates on better-than-expected results from its capital-markets and wealth-management divisions. Canadian Imperial Bank of Commerce beat estimates on better-than-expected results from its capital markets and retail banking units. CrowdStrike Holdings Inc.’s shares jumped in late trading after the company projected revenue for the full year that exceeded analysts’ estimates. Pernod Ricard SA expects to hit only the lower end of its forecast range for sales growth in the next few years. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.5% as of 7:18 a.m. New York time Nasdaq 100 futures rose 1.1% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 fell 0.3% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1639 The British pound fell 0.1% to $1.3579 The Japanese yen fell 0.1% to 159.49 per dollar Cryptocurrencies

Bitcoin rose 1.6% to $79,669.1 Ether rose 1.4% to $2,506.01 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.67% Germany’s 10-year yield advanced two basis points to 3.25% Britain’s 10-year yield was little changed at 5.03% Commodities

West Texas Intermediate crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Neil Campling and Margaryta Kirakosian.

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