(Bloomberg) — U.S. stock futures rose after Nvidia Inc. reported strong earnings after the New York market closed, bolstering optimism about a global artificial intelligence boom.
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The company reported second-quarter revenue of about $28 billion, beating analysts' expectations. It also announced a 1-for-10 stock split and raised its quarterly dividend by 150%, to 10 cents a share. Nvidia's shares rose 7% in after-hours trading following the results, and futures for the S&P 500 and Nasdaq 100 both rose. The dollar was little changed in Asia after three straight days of gains.
An index of Asian chipmakers rose to its highest level since February 2021, driven by performance from Nvidia.
“In the face of high expectations, the company once again pulled out all the stops and delivered,” said Ryan Detrick of the Carson Group, highlighting strong data center earnings.
Asian shares were mixed, with indexes in Australia, China and Hong Kong falling while Japan's index rose. South Korean shares reversed early losses after central bank Governor Lee Chang-yong said the chances of raising interest rates were limited for now. The Bank of Korea kept its key interest rate unchanged after its policy meeting.
Chinese stocks were the biggest drag on the region, with tech stocks leading the decline. An index of Hong Kong-listed tech stocks fell amid an intensifying price war between Alibaba Group Holdings Ltd. and Tencent Holdings Ltd. over cloud services.
Read more: Nvidia paves the way for continued rise in AI stocks
Asian government bonds were little changed after sliding on Wednesday. Policy-sensitive two-year Treasury yields rose 4 basis points in New York after Federal Reserve minutes showed officials remained in no rush to cut interest rates.
“Many” Fed officials expressed uncertainty about the extent to which policy was restraining the economy, but the minutes also noted that policy was “considered to be restrictive.”
“We felt that the signal from the FOMC reinforcing the possibility of higher long-term interest rates was negative for most Asian currencies and, by extension, for capital markets,” said Shin Yao Ng, investment director at Abdon. “It's a currency effect.”
In currency markets, a gauge of the dollar's strength extended its gains from Wednesday, hitting a one-week high. The yen was little changed against the dollar after falling to its lowest since late April. The People's Bank of China cut the yuan's exchange rate to its lowest since January.
The New Zealand dollar rose after Reserve Bank of New Zealand Governor Adrian Orr said the central bank did not want to risk a sudden rise in inflation expectations.
technology profit
U.S. tech earnings have been some of the strongest so far this first-quarter earnings season, with revisions in the sector outpacing the rest of the market, but Solita Marcelli of UBS Global Wealth Management said the results point to an expanding market.
“We are constructive on AI trends and continue to favor large technology companies given their favorable market position,” she said. “We forecast global technology revenues to grow 20% and 16% this year and next, respectively, led by the semiconductor sector, where we see investment opportunities.”
In Asia, South Korea announced a $19 billion incentive package to strengthen its semiconductor industry. This will be a major benefit for Samsung Electronics and SK Hynix, which continue to lead the way in the increasingly competitive industry.
Gold prices fell for the second straight day after falling 1.7% on Wednesday following the Fed minutes. West Texas Intermediate also fell, and is expected to fall for the fourth straight day. Copper prices fell on signs of weakening demand.
Major events this week:
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Eurozone S&P Global Services and Manufacturing PMI, Consumer Confidence, Thursday
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G7 Finance Meeting, May 23-25
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U.S. new home sales, initial jobless claims Thursday
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Federal Reserve President Raphael Bostic to speak Thursday
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US Durable Goods, Consumer Sentiment, Friday
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Fed's Christopher Waller to speak on Friday
Some of the key market developments:
stock
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S&P 500 futures were up 0.6% as of 12:08 p.m. Tokyo time.
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Nasdaq 100 futures rose 0.9%
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Japan's TOPIX rose 0.4%
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Australia's S&P/ASX 200 fell 0.5%
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Hong Kong Hang Seng Index falls 1.4%
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The Shanghai Composite fell 0.8%.
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Euro Stoxx 50 futures up 0.3%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was little changed at $1.0829.
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The Japanese yen remained almost unchanged at 156.77 yen to the dollar.
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The offshore yuan was little changed at 7.2536 yuan per dollar.
cryptocurrency
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Bitcoin remains almost unchanged at $69,434.88
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Ether rose 0.6% to $3,769.09.
bond
merchandise
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West Texas Intermediate crude fell 0.6% to $77.07 a barrel.
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Spot gold fell 0.3% to $2,370.88 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Zhu Lin.
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