Nvidia stock experienced a decline of 2.59% on the previous day, and its cumulative loss for the current month stands at 7%. This downward trend persisted into the current trading session, with the company's equity falling an additional 1.34% during overnight trading, largely attributed to reports concerning Meta was considering using Google’s chips for its AI model operations. Typically, the substantial market capitalizations of the Magnificent 7 technology firms would suggest such news would be detrimental to their stock performance. However, market participants are currently disregarding Nvidia's situation, as a broad-based increase in stock values is observed globally.
TL;DR
- Nvidia stock fell 2.59% yesterday and 1.34% overnight due to Meta considering Google chips.
- Despite Nvidia's drop, global stock markets are experiencing broad-based gains, including the S&P 500 and Nasdaq.
- S&P 500 companies show strong Q3 earnings growth, exceeding forecasts, and private markets also report revenue and Ebitda increases.
- Market optimism is high, with falling volatility and expectations of Federal Reserve interest rate cuts in December.
S&P 500 futures saw a gain of 0.29% earlier today, in premarket trading, following yesterday's closing increase of 0.91%. Stock exchanges in Asia and Europe experienced widespread gains. Notably, technology companies, including aren’t Nvidia, are also maintaining their performance; the Nasdaq Composite advanced by 0.58% yesterday.
Jim Reid and his colleagues at Deutsche Bank characterized the optimistic atmosphere in the following manner: “The 3-day advance for the S&P since Thursday’s low stands at +3.47%, which is the strongest 3-day move since the U.S.-China tariff reduction back in May and leaves the index less than 2% from its all-time high. The U.S. Equity advance was broad-based, with the small cap Russell 2000 up +2.14% and the equal-weighted S&P 500 up +1.45% on the day.”
Why the good cheer? Five main factors:
First, companies in the S&P are actually doing quite well. With 95% of them having reported Q3 results, “earnings per share (EPS) growth is tracking over 13% … cruising past the 7.4% consensus forecast,” according to LPL Financial analysts Jeffrey Buchbinder, Adam Turnquist, and Brian Booe. “S&P 500 revenue grew 8.4%, an atypically strong 2.5% above expectations at quarter-end.”
That good fortune is reflected in the private markets, too. Lincoln International—which tracks the private credit market—told Coins2Day that 68% of companies in its database grew their revenue over the preceding 12 months, and 62% grew their adjusted earnings before interest, tax, depreciation, and amortization (Ebitda). Revenue was up an average of 6.5% in the 12 months through Q3 2025; Ebitda was up 5.4%.
The VIX “fear” index, a gauge of volatility, has fallen 23.08% in the past five days, indicating that equity traders are no longer concerned about an artificial intelligence bubble disrupting market progress.
JPMorgan set a new target for the S&P for the end of 2026: 7,500, projecting “above-trend earnings growth of 13-15% for at least the next two years,” Dubravko Lakos-Bujas and his team told clients this morning.
It's increasingly probable that the U.S. Federal Reserve will reduce interest rates once more in December, introducing a fresh wave of more affordable capital, as indicated by the CME's Fedwatch tool, which presently assigns an 84% likelihood to a rate reduction.
Nvidia, in other words, is a fly in the market’s soup, but the soup still tastes pretty good. (Don’t cry too many tears for Nvidia investors, by the way, its stock is still up 32.41% year to date.)
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
- S&P 500 futures were up 0.29% this morning. The last session closed up 0.91%.
- STOXX Europe 600 was up 0.45% in early trading.
- The U.K.’s FTSE 100 was up 0.25% in early trading.
- Japan’s Nikkei 225 was up 1.85%.
- China’s CSI 300 was up 0.61%.
- The South Korea KOSPI was up 2.67%.
- India’s NIFTY 50 is up 1.24%.
- Bitcoin was at $86K.