(Bloomberg) — U.S. stock futures rose after Nvidia Corp.’s upbeat earnings results. after the closure of New York, which boosted optimism about the global artificial intelligence boom.
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The chipmaker said second-quarter revenue will be about $28 billion, exceeding analyst expectations. The company also announced a 10-for-1 stock split and increased its quarterly dividend by 150% to 10 cents per share. Futures on the S&P 500 and Nasdaq 100 both rose after Nvidia’s results sent its shares as much as 7% higher in after-hours trading. The dollar was little changed in Asia after rising for three straight days.
A gauge of semiconductor makers in Asia climbed to the highest level since February 2021, led by Nvidia’s earnings.
“Even against enormous odds, the company once again delivered and delivered,” said Ryan Detrick of Carson Group, highlighting strong data center revenue.
Asian stocks were mixed. Stock benchmarks fell in Australia, China and Hong Kong, while those for Japan rose. South Korean shares reversed early losses after central bank governor Rhee Chang Yong said the potential for a rate hike is currently limited. The Bank of Korea left its key interest rate unchanged after its policy meeting.
Chinese stocks were the biggest drag for the region, with tech names leading the decline. A poll of Hong Kong-listed technology stocks shifted due to a looming price war between Alibaba Group Holding Ltd. and Tencent Holdings Ltd. about cloud services.
Read more: Nvidia clears the way for AI stocks to continue to perform higher
Government bonds in Asia are little changed after Wednesday’s decline. Policy-sensitive two-year yields rose four basis points in New York after Federal Reserve minutes showed officials were in no hurry to cut rates.
“Many” Fed officials expressed uncertainty about the extent to which the policy is restricting the economy – but the minutes also noted that the policy was “viewed as restrictive.”
“I felt that the signals from the FOMC, which reinforce the likelihood of longer interest rates, are negative for most Asian currencies and therefore for the capital markets,” said Abrdn Investment Director Xin-Yao Ng. “It’s the currency effect.”
In currencies, a gauge of the dollar’s strength held a rally from Wednesday when it hit a one-week high. The yen was little changed after falling against the dollar to its lowest level since late April. The People’s Bank of China cut the yuan to its weakest level since January.
The New Zealand dollar rose after Reserve Bank Governor Adrian Orr said the central bank did not want to risk an explosion in inflation expectations.
Technical gains
U.S. tech gains were among the strongest in the first-quarter reporting season, with revisions in the sector outpacing the rest of the market. However, the earnings results also indicate an expanding market, according to Solita Marcelli of UBS Global Wealth Management.
“We remain positive on the AI trend and maintain our preference for big tech given its favorable market positions,” she said. “We forecast global earnings growth in the technology sector of 20% and 16% this year and next year respectively, led by the semiconductor sector, where we see investment opportunities.”
In Asia, South Korea unveiled a $19 billion stimulus package to boost its chip sector, a boon for Samsung Electronics Co. and SK Hynix Inc. in their race to stay ahead in an increasingly competitive industry.
Gold fell for a second day after falling 1.7% following the Fed’s minutes on Wednesday. West Texas Intermediate also fell, on track for its fourth daily decline. Copper prices fell on signs of weakening demand.
Main events this week:
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Eurozone S&P Global services and manufacturing PMIs, consumer confidence, Thursday
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G-7 financial meeting, May 23-25
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US new home sales, first jobless claims, Thursday
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Raphael Bostic of the Fed will speak on Thursday
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US durable goods, consumer confidence, Friday
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Fed CEO Christopher Waller will speak on Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures rose 0.6% as of 12:08 a.m. Tokyo time
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Nasdaq 100 futures rose 0.9%
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Japan’s Topix rose 0.4%
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Australia’s S&P/ASX 200 fell 0.5%
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Hong Kong’s Hang Seng fell 1.4%
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The Shanghai Composite fell 0.8%
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Euro Stoxx 50 futures rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0829
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The Japanese yen was little changed at 156.77 per dollar
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The offshore yuan was little changed at 7.2536 per dollar
Cryptocurrencies
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Bitcoin was little changed at $69,434.88
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Ether rose 0.6% to $3,769.09
Bonds
Raw materials
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West Texas Intermediate crude fell 0.6% to $77.07 a barrel
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Gold fell 0.3% to $2,370.88 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Zhu Lin.
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