Wall Street futures jumped on November 20 as better-than-expected earnings by Nvidia boosted investor sentiment and faded away worries that the alleged frenzy around artificial intelligence (AI) has reached its peak.
Additionally, investors await key US inflation data and Fed's FOMC meeting minutes.
Wall Street futures:
Nasdaq futures rose nearly 1.5 percent (nearly 365 points) to 25,087, while S&P 500 futures rose over 1 percent to 6,735.50, as seen at 4.10 pm IST. Dow Jones futures meanwhile grew 0.6 percent to 46,433.
The American stock markets had closed in the green earlier yesterday, with tech-heavy Nasdaq rising 0.56 percent to 24,640.52. S&P 500 rose 0.38 percent to 6,642.16, while Dow Jones closed 0.10 percent higher at 46,138.77.
Nvidia shares jump after Q3 results:
Nvidia shares jumped more than 5 percent in pre-market trading on November 20, after the Jensen Huang-led company released its results for the third quarter. During the quarter under review, the company’s revenue jumped 62 percent year-on-year (YoY) to $57 billion, as against the estimate of 56 percent rise.
Nvidia also gave a strong revenue forecast, suggesting that demand for its products remains healthy. After releasing the results, the company's CEO Jensen Huang shrugged off concerns about an AI bubble on a call with analysts, saying, "There has been a lot of talk about an AI bubble…From our vantage point, we see something very different." The Nvidia CEO described the transition to generative AI as "transformational and necessary" and predicted that agentic and physical AI would be "revolutionary".
HSBC analysts wrote in a note that Nvidia's earnings "should inject confidence back into the AI narrative." "Nvidia's across-the-board beat shows the AI boom is far from over," said Bob O'Donnell, chief analyst at Technalysis Research. "Demand still outstrips supply, with hyperscalers and server makers buying aggressively."
"AI exposure is essential for long-term wealth building," said Mark Haefele, CIO at UBS Global Wealth Management. "Investors should diversify across the AI value chain—from enabling technologies to intelligence and application layers," he further said.
"Amid a swell of concern heading into this print, Nvidia delivered not just solid results and guidance, but a beat-and-raise that was even stronger than most had expected," J.P.Morgan analysts said. "In our view, a testament to strong execution across Nvidia's vast and complex supply chain," they added.
Rival Advanced Micro Devices' shares rose over 5 percent, while other chip-related stocks, including Broadcom and Marvell Technology also recorded strong gains in the pre-market trading.
US jobs data:
The US government is set to release its much-awaited and long-delayed jobs report today after the end of the shutdown last week. The report is likely to show that growth picked up moderately in September, while the unemployment rate held steady near a four-year high of 4.3 percent, according to Reuters.
The report will provide essential cues for Federal Reserve’s decision on rate cut during its upcoming FOMC meet in December.
A growing number of Federal Reserve policymakers are now showing willingness to not ease the American central bank's rates further. Short-term interest rate futures now show much lower chances of the rate-setting Federal Open Market Committee (FOMC) lowering its borrowing costs on December 10, when the Fed wraps up its last policy meeting of 2025.
Traders are now seeing a 34 percent chance of a December rate cut, down from about 50 percent seen a day prior, according to the CME FedWatch Tool quoted by Reuters.
The key government data reports, which are expected to come, will remain in focus as they will shed light on Fed’s possible decision during the upcoming FOMC meeting.
Global markets:
Wall Street was accompanied by most of its global peers. Japan’s Nikkei 225 rose nearly 3 percent to 49,920, while South Korea’s KOSPI was up 2 percent. Taiwan Weighted jumped over 3 percent.
European markets were also in green, with Germany’s DAX rising over 1 percent. UK’s FTSA and France’s CAC were up 0.75 percent and 0.92 percent respectively.
(With inputs from Reuters)
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