Nvidia reported quarterly revenue above analysts’ expectations and offered a higher forecast for the coming quarter, yet the market reaction was restrained. The chip maker’s shares rose roughly 3% in after-hours trading but most of that gain was later relinquished, leaving investors with lingering questions about rising competition and the narrow set of customers that drive much of Nvidia’s revenue.
The subdued response suggests that much of Nvidia’s AI-driven growth may already be reflected in its valuation, even as corporate spending on AI infrastructure appears to be accelerating. That broader spending trend showed up in Asian markets, where chipmakers and computing hardware vendors dominate equity indices. South Korea’s Kospi added nearly 4% on Thursday and has rallied about 50% so far this year, having roughly doubled over the past six months.
The tech sector’s performance was uneven elsewhere. While software stocks broadly continued to regain ground, some high-profile names weakened after their results. Salesforce retreated about 4% overnight following its report, and cloud HR software provider Workday slid roughly 8%, touching five-year lows. Despite these mixed signals, the S&P 500 managed a notable 0.8% gain on Wednesday and futures retained those gains into Thursday’s session. European equities were firmer amid a busy earnings calendar.
Attention in Japan centered on the Bank of Japan as Prime Minister Sanae Takaichi nominated two board candidates seen as dovish. The nominations initially weighed on the yen, as some market participants drew parallels with concerns over central bank independence elsewhere. However, many investors noted that the appointees would replace two similarly dovish officials, and the initial impact on the currency faded as the yen found firmer footing later.
China’s currency has continued to strengthen. The yuan reached its best level versus the dollar in nearly three years and climbed to a nine-month high against the euro on Thursday, underlining divergent currency dynamics in the region.
Energy markets kept a wary eye on diplomatic developments in Geneva, where U.S.-Iran nuclear talks resumed on Thursday. Betting markets still implied more than a 50% probability of a limited U.S. military strike within the next month, a geopolitical risk that could influence oil prices. Despite that, crude remained comparatively calm, a development supported by media reports that OPEC+ is considering increasing production at its next meeting.
Chart of the day
South Korea’s rally on Thursday was led by major chip manufacturers such as Samsung Electronics and SK Hynix after Nvidia’s upbeat quarterly report. The surge in the Korean market has also been attributed to recent governance reforms championed by President Lee Jae Myung. On Wednesday, parliament passed a third revision to the Commercial Act intended to strengthen protections for shareholders, a move investors have cited as supporting the rally.
Events to watch
- U.S. weekly jobless claims (8:30 a.m. EST)
- U.S. 7-year note auction
- Resumption of U.S.-Iran nuclear talks in Geneva
The muted market response to Nvidia’s results underscores two concurrent dynamics: the market’s strong appetite for AI themes appears to have lifted valuations already, and the performance of individual tech names can diverge sharply even as index-level gains persist. Equity moves across the U.S., Europe and Asia reflected those tensions on a busy day for corporate earnings and policy-focused headlines.
At the same time, currency and energy markets reacted to distinct drivers. The yen’s intraday swings reflected governance and policy nomination news in Tokyo, while the yuan’s advance against major currencies highlighted its own independent path. In energy, geopolitical uncertainty around U.S.-Iran negotiations and signals from OPEC+ influenced market sentiment, but did not produce a large price spike in crude.
Investors and market watchers will likely monitor the same set of cross-currents in coming sessions: corporate earnings that can reinforce or challenge lofty AI-related expectations; central bank and government appointments that can shift currency and rate dynamics; and diplomatic developments that feed directly into energy market risk premia.