Stock Market Today: Nvidia earnings power Nasdaq surge and tech-led rally

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U.S. equity futures moved firmly higher Thursday, lead by a broad surge in tech stocks powered by AI chipmaker Nvidia’s blowout fourth quarter earnings that delivered a nearly audible sigh of relief on Wall Street.

Nvidia, now the market’s third-largest stock based on overall value, posted stronger-than-expected January quarter earnings of $5.16 a share, with revenue more than tripling from a year earlier to $22.1 billion. 

The semiconductor group’s robust near-term outlook, fueled by seemingly unending demand for AI-related technologies from megacap tech rivals, not only has the stock poised for a record at the start of trading, it also looks set to help add more than 2% to the Nasdaq at the opening bell.

Nvidia  (NVDA)  , dubbed “the most important stock on planet earth” by Goldman Sachs analysts, was last marked 13.2% higher in premarket trading, indicating an opening-bell price of $763.80 each.

“Nvidia’s earnings beat boosted sentiment and eased concerns over stretched valuations, providing room for the AI theme to continue to drive markets,” Saxo Bank strategists wrote. “With Nvidia’s earnings result out of the way and gaining on strong outlook we expect the momentum in equities to continue in the weeks to come.” 

Tech-led rallies in overseas markets, tied to Nvidia’s blowout earnings, also helped the Nikkei 225 in Japan reach a record 39,156.97 points Thursday, lifting the benchmark past the peak it reached in spring 1989. 

The surge in tech names and the buoyant market sentiment are also offsetting a modest move higher in Treasury bond yields tied to yesterday’s release of the minutes from the Federal Reserve’s January policy meeting.

Investors are now expecting rate cuts to begin no earlier than June after officials “highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained.”

Benchmark 10-year note yields were last marked 3 basis points higher at 4.311% while 2-year notes were pegged at 4.667%.

The lack of any reference to a near-term rate hike from the January minutes, however, has the dollar index moving 0.230% lower against a basket of its global peers to 103.695.

On Wall Street, futures contracts tied to the S&P 500 suggest an opening-bell gain of around 64 points, a move that would lift the benchmark to within a point of its all-time high of 5,048.39 points.

Futures tied to the Dow Jones Industrial Average, meanwhile, are indicating a 1650 point gain with those linked to the Nasdaq primed for a 368 point surge.

In Europe, the regionwide Stoxx 600 was marked 0.8% higher in early Frankfurt trading, lead by big gains in tech, while Britain’s FTSE 100 added 0.29% in London.

China stocks, alongside a big gain in Hong Kong, powered the MSCI ex-Japan index to a 1.03% gain heading into the close of trading while the Nikkei 225 ended 2.19% higher at 39,098.68 points in Tokyo.

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