AI heats up as Nvidia spurs tech rally on Wall Street

Tech stocks roared back into life after Nvidia beat expectations again with its latest revenue forecasts, while software-as-a-service giant Salesforce and cybersecurity firm CrowdStrike surged as artificial intelligence bolstered their respective offerings.

The trade war between the US and Canada continued to escalate with President Donald Trump signing an executive order to rename Lake Ontario as Lake America, while oil prices advanced amid reports the White House had no plans to return to its June ceasefire with Iran.

French stocks tumbled with lenders Societe Generale and BNP Paribas among the biggest drags as presidential candidates promising big spending programmes add to uncertainty for the heavily indebted European nation.

And Australian futures are pointing to a modestly positive start for the ASX, with the trans-Tasman earnings season drawing to a close with results from Harvey Norman, Virgin Australia, Air New Zealand, Port of Tauranga and Sky Network Television among those on the calendar.

Smashing expectations

Nvidia surged 7.8% in late trading, spurring gains for tech companies on Wall Street as the chipmaker again beat analysts’ earnings estimates and offered an even rosier forecast than predicted. Separately, The Information reported Nvidia had agreed to buy open-source AI repository Hugging Face for US$12.9 billion.

South Korean chipmaker SK Hynix said it planned to start production of its next-generation HBM4E chips at a facility in Indiana in 2029, and predicted the memory chip shortage would persist until 2030.

Meanwhile, Anthropic rolled out a research preview of its model hardware standard framework for agents to operate physical devices in scientific research and advanced manufacturing, and was separately part of a group of major tech companies calling for urgent action on a global response to AI-backed hacks.

Software companies joined the tech rally on Wall Street with Salesforce jumping 22% and CrowdStrike up 20% after the companies reported strong earnings, backed by blossoming AI-fuelled demand.

The Nasdaq Composite climbed 1.2% in late trading, with the S&P 500 up 0.5% and the Dow Jones Industrial Average nudging up 0.2%, led by Salesforce and Nvidia.

“The key question now is whether Nvidia's result can turn into a broader market rally or whether investors continue to rotate selectively into companies with direct exposure to AI spending,” Moomoo market strategy consultant Greg Boland said in a note.

Stock markets were mixed across the Atlantic, with the UK’s FTSE 100 down 0.8% and Germany’s DAX advancing 0.3%.

Meanwhile, France’s CAC 40 sank 1.7% amid growing uncertainty about next year’s presidential election, with the first debate among candidates getting agreement across the political divide that the nation faced economic troubles. The kiwi dollar traded at 51.07 euro cents at 7am in Auckland from 51.06 cents yesterday.

US President Trump signed an executive order to change the name of Lake Ontario to Lake America, further escalating the trade war with Canada, accusing his northern neighbour of “ripping us off for a long time on trade, very sadly”. The North American neighbours have slapped 50% tariffs on a range of products from each other’s nation.

Crude rumblings

Brent crude oil futures rose 2.4% to US$89.95 a barrel amid reports the Trump administration told mediators it had no interest in returning to the terms of the June ceasefire with Iran.

Meanwhile, Bloomberg reported that oil was starting to flow through the Strait of Hormuz, with estimates of 6 million-to-8 million barrels moving through the channel a day.

The kiwi dollar traded at 59.49 US cents from 59.50 cents yesterday ahead of Federal Reserve chair Kevin Warsh’s keynote address at the annual central bankers’ symposium at Jackson Hole, Wyoming.

Meanwhile, Australian futures were pointing to a 0.1% gain for the S&P/ASX 200 index when trading opens across the Tasman as earnings season draws to a close.

Moomoo’s Boland said New Zealand’s S&P/NZX 50 index would probably open flat to slightly higher, noting the rally on Wall Street wasn’t broad-based with weakness among defensive and consumer stocks. The NZX 50 is on track to snap three weeks of gains.

Air NZ, Channel Infrastructure, Sky TV and Port of Tauranga were among the top 50 companies reporting today, while Michael Hill International, Delegat Group and Comvita also on the calendar.

Local data today include ANZ’s monthly consumer confidence survey and Statistics New Zealand’s filled jobs for July.

Reporting by Paul McBeth. Image from Supradoc on Unsplash.