Nvidia's Strong Earnings Boost Confidence in AI Sector

World shares surged on Thursday as Nvidia reported stronger than expected quarterly earnings, alleviating concerns that AI-driven stock prices had become overvalued. According to the Seattle Times, the future for the S&P 500 rose 1.2%, while the Dow Jones Industrial Average gained 0.5%.

In early European trading, Germany's DAX rose 0.8%, and Britain's FTSE 100 added 0.6%. In Asia, Japan's Nikkei 225 index initially soared as much as 4.2% before closing nearly 2.7% higher, with technology stocks rallying in response to Nvidia's impressive report of $57 billion in quarterly revenue.

This figure significantly exceeded market expectations. South Korea's Kospi added 1.9%, led by technology and energy stocks, with investors encouraged by Nvidia's performance and reports suggesting the U.S. may delay planned semiconductor tariffs.

Stocks like Samsung Electronics and SK Hynix saw increases of 4.2% and 1.6%, respectively. Meanwhile, Chinese markets ended mixed, with reports that the government might implement more measures to revive its struggling property sector.

The Hang Seng Index in Hong Kong remained largely unchanged, while the Shanghai Composite index fell by 0.4%. Taiwan's Taiex closed 3.2% higher, and India's BSE Sensex increased by nearly 0.7%. Australia’s S&P/ASX 200 gained 1.2%, also driven by technology stocks.

The U.S. stock market had experienced volatility ahead of Nvidia's earnings report, with the S&P 500 breaking a four-day losing streak, rising 0.4%. Nvidia, having briefly surpassed a market valuation of $5 trillion, is now the largest stock on Wall Street, significantly impacting the S&P 500.

The company’s performance is critical as it has become a bellwether for the broader excitement surrounding AI technology, given that many companies utilize its chips to enhance their AI capabilities. Traders were also cautious ahead of a September jobs report from the U.S. government, which could influence expectations regarding future interest rate cuts by the Federal Reserve.

The Fed has already cut rates twice this year as the job market showed signs of slowing. However, inflation remains a concern, which might lead some Fed officials to pause further rate cuts. In commodities, U.S. benchmark crude oil rose to $59.61 per barrel, while Brent crude increased to $63.89.

The U.S. dollar gained against the Japanese yen, reflecting expectations of delayed fiscal measures from Japan's government. The euro, on the other hand, decreased slightly against the dollar. This bullish response to Nvidia's earnings reflects a renewed confidence in the potential of AI technologies in the marketplace.