By COMFORT OGBONNA
Asian stocks climbed on Thursday after Nvidia delivered quarterly results that exceeded expectations, giving technology shares a boost and helping restore investor confidence after fresh U.S. data showed inflation remained stubbornly elevated.
The gains came as investors weighed strong demand for artificial intelligence technology against continuing uncertainty over the outlook for U.S. interest rates.
MSCI’s broadest index of Asia-Pacific shares excluding Japan rose 0.2%, extending its advance for a third consecutive session. The move followed Nvidia’s report showing quarterly revenue had more than doubled from a year earlier, while the company also projected third-quarter revenue above Wall Street expectations.
Nvidia shares jumped 4.7% in after-hours trading following the results, while futures tied to the S&P 500 rose about 0.3%.
The strong performance from the world’s most valuable chip companies has become an important signal for investors assessing whether the enormous spending on artificial intelligence infrastructure can continue to support technology stocks.
Nvidia’s results also lifted companies throughout the broader technology supply chain, including chip manufacturers, semiconductor equipment makers and other hardware producers expected to benefit from continued investment in AI data centers.
The optimism surrounding Nvidia contrasted with concerns about U.S. inflation. Data released overnight showed the personal consumption expenditures price index increased 0.2% in July from the previous month, following a 0.1% decline in June.
The figures reinforced concerns that inflation may remain above the Federal Reserve’s target for longer than investors would prefer, potentially limiting the central bank’s ability to cut interest rates aggressively.
Despite those concerns, U.S. stocks ended Wednesday’s session with only modest moves. The S&P 500 finished roughly unchanged as investors digested the inflation data and awaited Nvidia’s earnings report.
South Korea’s benchmark KOSPI gained about 1%, although the index gave up some of its earlier advance after the Bank of Korea raised its benchmark interest rate by 25 basis points to 3%.
The rate increase was broadly expected by financial markets and reflected continuing concerns about price pressures.
Taiwanese stocks rose 0.3%, supported by optimism surrounding the technology sector and expectations that continued demand for AI-related products could benefit the island’s major semiconductor manufacturers.
Japan’s Nikkei 225, meanwhile, slipped 0.3%, showing a more cautious response to the broader regional rally.
Investors are closely watching technology stocks because of their significant influence on global equity markets. Nvidia’s results have helped reassure markets that spending on artificial intelligence remains strong, even as investors debate whether valuations across the technology sector have become too high.
The company’s results also provided fresh evidence that demand for advanced computing chips remains strong. Nvidia has emerged as one of the biggest beneficiaries of the global race to develop AI systems, supplying processors used by technology companies to train and operate increasingly sophisticated models.
The strength of the company’s outlook could therefore have implications far beyond its own share price.
Companies that manufacture memory chips, servers, networking equipment and other components required for AI infrastructure could also benefit if major technology companies continue increasing their spending.
In currency markets, the U.S. dollar remained firm. The dollar index, which measures the greenback against a basket of six major currencies, stood at 99.16, close to its highest level of the past week.
The dollar’s strength has been supported by changing expectations for U.S. interest rates as investors assess the latest inflation and economic data.
Gold prices also moved higher, with bullion gaining about 0.3% to $4,604.27 an ounce after falling during the previous session.
Cryptocurrency markets were also firmer. Bitcoin rose about 0.5% to $78,824.80, while ether gained 0.9% to $2,493.41.
Gold and cryptocurrencies have benefited from renewed interest in trades that seek protection against potential long-term weakness in the purchasing power of the U.S. dollar. Those trades have also been influenced by recent moves in U.S. government bond markets and changing expectations for monetary policy.
For investors, however, the immediate focus remains divided between two competing forces.
On one side, Nvidia’s stronger-than-expected results are reinforcing optimism about the AI boom and providing support for technology stocks around the world. On the other, persistent inflation is complicating the outlook for interest rates and could limit the amount of monetary support available to financial markets.
The combination is likely to keep markets sensitive to incoming economic data, particularly reports on inflation, employment and consumer spending.
For now, the technology sector’s strength is helping Asian markets extend their recent gains, with Nvidia’s latest results providing investors with a fresh reason to remain optimistic despite the continuing challenges posed by inflation and interest rates.
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