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Nvidia earnings send stock indices to new highs

Stocks around the globe were trading higher late in the week after semiconductor giant Nvidia’s results pleased investors after the bell on Wednesday. The artificial intelligence-driven equity rally continued with tech stocks outpacing the broader market as traders ramped up their bets on AI.

Shane Strowmatt, LGT
Temps de lecture
5 minutes
Stock chart
© Shutterstock

In New York, the Dow Jones Industrial climbed 1.2% and the S&P 500 gained 2.1% on Thursday. Both indices reached new all-time highs. The Nasdaq-100 jumped 3%, driven by a 16.4% rally in Nvidia stock, its fourth-largest constituent. The chipmaker added the largest amount to its market capitalization of any stock in a single trading day on Thursday, just weeks after Meta accomplished the same feat. Nvidia’s market capitalization increase by USD 277 billion during Thursday’s session, beating Meta’s increase of USD197 billion on 2 February. Tech stocks are being rewarded lavishly for cementing the narrative that artificial intelligence is generating revenue and will continue to do so in the future. That narrative is driving a larger market rally beyond tech stocks.

On the macro side, the US labour market continued to surprise to the upside. Weekly US initial jobless claims hit their lowest value in a month last week, falling to 201,000 applications. That was a decrease of 12,000 when compared to the previous week. The number of applications for jobless benefits has remained near record lows for months, despite higher interest rates by the Federal Reserve (Fed). The data as well as other labour market data, suggest the labour market can withstand high interest rates for longer as the Fed waits for its tight monetary policy to slow down inflation.

The Composite Purchasing Managers’ Index (PMI) for the US fell slightly in February to 51.4 from 52 in January. The result was mixed, however, as manufacturing activity expanded at the fastest pace since September 2022. Manufacturing PMI came in at 51.5 points, up from 50.7 in the previous month.

Euro area PMI increased to 48.9 in February. That level is still below the 50 mark, which separates contraction from expansion, but is an eight-month high and ahead of economists’ expectations. Manufacturing activity dropped, however, mainly due to the bloc’s largest economy, Germany. The Euro Stoxx 50 was up 1.7% on Thursday and Germany’s DAX gained 1.5%.

In the Asia-Pacific region, stock markets were slightly higher to finish the last session of the week. Holding back gains were real estate data out of China. Sales prices for new commercial housing in major Chinese cities fell 0.3% on the month in January. The sector has been under pressure, falling the most in nine years at the end of 2023. Hong Kong's Hang Seng Index was trading marginally higher, while the Shanghai Composite gained 0.6%. In South Korea, the Kospi increased 0.1% and Australia’s S&P/ASX 200 gained 0.4% to finish the week. Japanese markets were closed on Friday for a holiday.

Corporate news in focus: Quarterly figures from Allianz, BASF, Deutsche Telekom.

Economic data in focus: German gross domestic product, Swiss employment figures, Germany’s ifo Business Climate Index.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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