Stocks rally as strong Nvidia earnings ease Fed rate cut concerns

Asian stock markets surged on Thursday after a blockbuster earnings report from chip giant Nvidia helped calm fears of an AI-driven market bubble, overshadowing a Federal Reserve report that dampened hopes for a December interest rate cut.

Global equities have faced pressure in recent weeks amid concerns that valuations — especially in the tech sector — have run too far ahead following this year’s record-setting rally. Analysts have also warned that massive investments in artificial intelligence may take longer to generate meaningful profits, with some pointing out that the necessary infrastructure is still being built.

Nvidia’s latest earnings report — closely watched as a gauge of AI sector momentum — beat expectations thanks to strong demand for its advanced chips. Chief executive Jensen Huang dismissed recent bubble worries, saying: “There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different.”

Nvidia shares jumped more than 5 percent in after-hours trading, while futures for the S&P 500 and Nasdaq also climbed.

Tech stocks led the rally across Asia, with gains for South Korea’s Samsung and SK hynix, Taiwan’s TSMC, and Japan’s SoftBank. Broader markets also recorded strong sessions: Tokyo rose more than four percent at one point, while Seoul and Taipei gained over two percent. Hong Kong, Shanghai, Sydney, Singapore, Wellington and Jakarta also advanced.

“Nvidia’s latest forecast has, for now, dulled the sharpest edges of the AI-bubble anxiety that had gripped global markets,” said Stephen Innes of SPI Asset Management. He cautioned, however, that markets remain caught between “AI euphoria and debt-filled reality.”

The upbeat mood offset concerns raised by minutes from the Fed’s October policy meeting, which indicated officials are hesitant to cut interest rates for a third consecutive time in December. Expectations of steady rate cuts into 2026 have supported this year’s equity rally, but persistent inflation has complicated the outlook.

“Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year,” the minutes noted. Fed Chair Jerome Powell has also said that a December rate cut is “not a foregone conclusion.”

Investors are now awaiting the release of delayed US jobs data for September, originally postponed due to the government shutdown. However, the Bureau of Labor Statistics said it will not publish October figures separately and will include them in the November report due on December 16.

Rodrigo Catril of National Australia Bank said the missing October jobs report “leaves policymakers without a key piece of evidence for the December meeting,” prompting traders to sharply scale back expectations for a rate cut next month to just 28 percent.

The shift in interest rate expectations strengthened the US dollar, which climbed to 157.47 yen — its highest level since January. The yen was already under pressure from concerns over Japan’s fiscal outlook ahead of a planned stimulus package from Prime Minister Sanae Takaichi, fueling fears of increased borrowing and pushing bond yields to record highs.