US, European stocks surge ahead of Nvidia earnings; oil falls

Stocks on both sides of the Atlantic rallied in the run-up to another expected surge in earnings and revenue for chipmaker Nvidia, with investor sentiment on the mend as soothing words from US President Donald Trump on the Middle East conflict eased fears about energy shock.

Airlines took off as oil prices declined, with United Airlines and Delta Air Lines leading gains on the S&P 500, setting a strong lead for the likes of carriers closer to home such as Air New Zealand and Qantas Airways.

OpenAI is reportedly working on a fast-track to going public after winning its recent legal battle with Elon Musk over its for-profit status, while SpaceX is expected to file its paperwork for a June initial public offering.

The upbeat mood is expected to carry through to New Zealand and Australian markets, with insurer Tower and Turners Automotive Group among those due to report today, while Statistics New Zealand will release its latest merchandise trade figures.

The final countdown

Nvidia was up 0.9% in late trading ahead of its latest quarterly report after the bell, with the chipmaker expected to lift revenue almost 80% as with semiconductor firms surging in recent weeks on renewed optimism about the future of artificial intelligence.

Meanwhile, OpenAI was reported to be eyeing up an initial public offering as soon as September, with papers expected to be filed in the coming days or weeks.

That comes as investors prepare for the imminent release of SpaceX’s IPO filing, with Musk’s satellite and rocket maker said to be preparing for a public debut next month. Space companies have been rallying ahead of the presumed IPO, with local favourite Rocket Lab climbing 5% to US$133.65 in late trading.

Goldman Sachs – which is reportedly working on both offerings – led the Dow Jones Industrial Average higher in late trading, with the blue-chip index up 1.3% as investors regained their appetite for riskier assets.

The S&P 500 climbed 1% in late trading, with airlines United and Delta among those leading the benchmark higher, while the tech-heavy Nasdaq Composite advanced 1.3%.

Across the Atlantic, the UK’s FTSE 100 rose 1%, Germany’s DAX gained 1.4% and France’s CAC 40 increased 1.7%.

Calmer waters

Brent crude oil futures dropped 5.8% to US$104.85 a barrel after US President Trump said talks with Iran were advancing and the war could end shortly, while three oil tankers got through the Strait of Hormuz.

The Polymarket prediction market was pricing in a 30% chance of a permanent deal being reached by the end of the month and a 40% chance by the end of June.

The yield on 10-year US Treasuries fell 9 basis points to 4.57% and the kiwi dollar climbed to 58.75 US cents at 7am in Auckland from 58.30 cents yesterday. The minutes to the latest Federal Reserve’s policy review showed a majority of voting members expected higher interest rates would be needed if inflation continued to run above the 2% target.

“For the NZX today, the stronger Wall Street lead and sharp fall in oil prices should support a rebound across growth and consumer-facing sectors,” Greg Boland, market strategy consultant at Moomoo said in a note. “Investors will also watch whether technology and infrastructure names recover following this week’s selloff, while attention locally may remain on interest rates and ongoing positioning around major energy and infrastructure stocks.”

Australian futures were pointing to a 1.4% surge for the S&P/ASX 200 index when trading opens across the Tasman. New Zealand’s S&P/NZX 50 index dropped 1.6% yesterday.

The local earnings season continues today, with insurer Tower and Turners Automotive headlining the day, while AFT Pharmaceuticals and My Food Bag are also in focus.

Vista Group International holds its hybrid annual meeting in Auckland today, where activist investor Stephen Mayne has put himself up as a director in his campaign for dual-listed New Zealand companies to adopt Australia’s remuneration report practices. The New Zealand Shareholders’ Association is voting against Mayne’s election.

Ventia Services Group is also holding its annual meeting today.

Stats NZ will release April trade figures and Reserve Bank credit card data are also due today.

The Treasury’s New Zealand Debt Management unit holds its weekly auction today, with $450 million of 2031 and 2036 notes for sale.

Reporting by Paul McBeth. Image from Solen Feyissa on Unsplash.