Nasdaq futures surge over 400 points after strong Nvidia results; All eyes on jobs report

Futures on Wall Street have surged higher on Thursday, November 20, in response to the blockbuster results reported by Nvidia Corp. which has assuaged investor fears about a potential AI bubble.

Gains are being led by the Nasdaq futures, which are up 375 points, followed by the Dow futures, which are up 180 points, while the S&P 500 futures are trading with gains of 70 points.

Nvidia Corp beat expectations on both revenue and the Earnings Per Share (EPS) front. The company’s guidance for the ongoing quarter was also higher than analyst expectations, sending the stock higher by over 5% in extended trading.

Nvidia CEO Jensen Huang also addressed concerns regarding a potential AI bubble on the company’s earnings call. “From our vantage point, we see something very different,” he said. Concerns over AI valuations have been the biggest factor in the recent Wall Street sell-off, with the Dow Jones falling over 2,000 points in the four sessions prior to Wednesday.
In response to Nvidia’s results, shares of other chipmakers, Broadcom, Qualcomm, AMD and TSMC have also gained between 2.5% to 4% in extended trading on Wall Street.

Benchmark indices were mainly in wait-and-watch mode in regular trading on Wednesday ahead of Nvidia’s results, which were reported after the closing bell. The Dow ended above the flat line, putting and end to the four-day losing streak, while the S&P 500 and Nasdaq gained 0.4% and 0.6% respectively.

All eyes are now on the second big news trigger for the week, which is the Non-farm payrolls data for September, which will be the first major official statistic reported after the end to the longest government shutdown in US history. Analysts are projecting an addition of 55,000 jobs for the month compared to August. The unemployment rate may or may not be reported along with the jobs report.

Elsewhere, Fed minutes released last evening showed “many” officials stating that there is no need to cut rates further, further enforcing signs of a divided central bank ahead of the December 10 policy decision. As of Thursday morning, the probability of the Fed easing by 25 basis points next month fell to 33%, from 42% previously, according to the CME FedWatch.

In light of the dwindling chances of a Fed rate cut next month, the US Dollar index gained the most since September, rising back above the mark of 100, while Gold prices remain below the $4,100 mark, but are not seeing any steep fall.