Asian Markets Mostly Advance as Nvidia's Strong Earnings Ease AI Fears
Asian stock markets have predominantly risen in Thursday trading, following stronger-than-anticipated earnings from chipmaker Nvidia. This development has helped mitigate some investor anxieties surrounding the rapid expansion of artificial intelligence technologies.
Regional Market Movements
In Japan, the Nikkei 225 briefly surpassed the 59,000 mark for the first time before settling with a 0.2% increase to 58,715.33. Notable performers included SoftBank Group, which saw its shares surge 3.5% due to its focus on AI, while chipmaker Tokyo Electron declined by 2.8%. The market also received a boost from Prime Minister Sanae Takaichi's appointment of two economists, perceived as advocates for low interest rates, to the central bank's board.
South Korea's Kospi experienced a significant rally, jumping 2.3% to 6,222.29, driven by gains in tech-related stocks. This follows the index breaking the 6,000 level for the first time on Wednesday, marking a 44% increase since the start of the year amid political upheavals that concluded with former President Yoon Suk Yeol's life imprisonment. Samsung Electronics led the charge with a 5.5% rise, while SK Hynix added 2.5%.
Elsewhere, Hong Kong's Hang Seng dipped 0.4% to 26,656.29, and the Shanghai Composite edged 0.1% lower to 4,144.08. Australia's S&P/ASX 200 advanced 0.5% to 9,174.50, while Taiwan's Taiex and India's Sensex posted modest gains of 0.2% and 0.3%, respectively.
Nvidia's Impact on Global Markets
Nvidia's earnings report has had a profound influence on global financial markets, given its status as the world's most valuable company and the largest constituent of the S&P 500. The company's latest quarterly revenue soared 73% year-over-year to $68 billion, with a forecast of $78 billion for the current quarter, exceeding analyst expectations. CEO Jensen Huang emphasized that demand for Nvidia chips continues to "skyrocket" and stated, "AI is here, AI is not going to go back." Following the announcement, Nvidia's stock rose 0.2% in after-hours trading.
This robust performance has helped alleviate concerns about the sustainability of the AI craze and whether substantial investments will yield returns. However, many investors remain cautious. Thomas Mathews, head of markets for Asia Pacific at Capital Economics, noted in a research note that strong profit growth, highlighted by recent earnings reports including Nvidia's, supports a positive outlook for the S&P 500 in 2026, forecasting it to reach 8,000 by year-end.
Broader Financial Context
In the United States, the S&P 500 rose 0.8% to 6,946.13 on Wednesday, with the Dow Jones Industrial Average climbing 0.6% to 49,482.15 and the Nasdaq composite gaining 1.3% to 23,152.08. Early Thursday trading saw U.S. benchmark crude oil increase by 16 cents to $65.58 per barrel, while Brent crude rose 21 cents to $71.90. Gold and silver prices declined, with gold losing 0.3% and silver falling 2%. The U.S. dollar weakened to 155.89 Japanese yen from 156.39 yen, and the euro traded slightly higher at $1.1817.
