Asian markets jumped on Thursday after Nvidia posted huge earnings, easing fears that the AI boom is turning into a bubble. The strong numbers helped balance out a new report from the US Federal Reserve that hurt hopes for an interest rate cut in December.
Lately, global markets have been nervous. Many analysts have warned that tech stocks might be overpriced after a massive rally this year. Some believe the huge investments flowing into artificial intelligence won’t pay off anytime soon, while others argue the world still doesn’t have enough infrastructure to support AI at the scale investors expect.
That’s why everyone was waiting to see Nvidia’s results — and the company delivered. The chipmaker easily beat expectations thanks to massive demand for its AI processors. CEO Jensen Huang pushed back on bubble fears, saying what Nvidia sees “is something very different.”
Investors responded quickly. Nvidia shares jumped more than five percent in after-hours trading, and futures for the S&P 500 and Nasdaq also moved higher.
Asian markets followed the lead.
Tech stocks across the region surged — Samsung and SK hynix in South Korea, TSMC in Taiwan, and SoftBank in Japan all had a strong session. Japan’s Nikkei even spiked more than four percent at one point. Markets in Hong Kong, Shanghai, Singapore, Sydney, Wellington, Jakarta, and others also traded higher.
Still, analysts warn that the excitement hasn’t removed the risks. Stephen Innes from SPI Asset Management said Nvidia’s results eased the “AI bubble” fears for now, but markets are still walking a thin line between optimism and concerns about global debt. He said the results may help spark a final “Santa rally,” but don’t change the big picture.
On top of that, the Federal Reserve minutes from October showed officials are not ready to cut interest rates again in December. Rate-cut expectations have been a major force pushing stocks upward this year, but stubborn inflation has made the Fed more cautious.
The Fed minutes said many officials believed keeping rates where they are for the rest of the year was the right move. Fed Chair Jerome Powell recently said a December cut is “not a foregone conclusion.”
Investors are now watching for US jobs data, scheduled for release Thursday after being delayed by the government shutdown. However, the Labor Department said it will skip October’s report and fold the data into November’s release on December 16.
Analysts say skipping the October numbers may make it harder for the Fed to justify any rate cut next month. Expectations for a December cut have already dropped sharply — now down to just 28 percent.
The shift in rate expectations pushed the US dollar higher, including a jump to 157.47 yen — its strongest level since January. The yen was already weak due to concerns about Japan’s budget plans and expectations that Prime Minister Sanae Takaichi may rely on more borrowing to fund her stimulus package.
Bond yields in Japan have hit record highs as a result.
Market Snapshot (around 0230 GMT):
- Tokyo (Nikkei 225): Up 3.1%
- Hong Kong (Hang Seng): Up 0.2%
- Shanghai Composite: Up 0.3%
- Dollar/Yen: 157.10
- Euro/Dollar: $1.1516
- Pound/Dollar: $1.3038
- WTI Crude: Up 0.5% to $59.71
- Brent Crude: Up 0.3% to $63.72
- Dow Jones: Up 0.1%
- FTSE 100: Down 0.5%
