Mixed Asian Markets as Nvidia Shares Surge on Strong Earnings and AI Growth Forecast

Asian markets showed mixed performance on the morning of the report, with Japan's Nikkei rising about 0.5%, Hong Kong's Hang Seng up 0.4%, Shanghai's market stable, and Seoul's market declining approximately 1.5%. This followed a strong session on Wall Street, where Nvidia's robust earnings report boosted technology stocks and investor confidence in AI-related investments. The Nasdaq technology-heavy index rose 1.4%, the S&P 500 gained 0.6%, and the Dow Jones increased by 0.2%. The technology sector (XLK) surged nearly 3%, while the consumer discretionary sector (XLY) fell about 1%. Nvidia, the world's largest market cap company, projected a 70% revenue growth for the next fiscal year, alleviating fears of an AI bubble. Its market value increased by around $443 billion, marking a personal record but still behind Microsoft's $450 billion single-day gain in July.

Nvidia's strong performance lifted other chip stocks such as Broadcom, SK Hynix, and Intel, with the SOXX ETF rising about 2%. Salesforce also outperformed expectations with strong Q2 revenue, boosting software stocks like Adobe and Autodesk. Cybersecurity firms including Okta and CrowdStrike saw significant gains following optimistic forecasts tied to rising demand for AI-driven security products. However, Marvell Technology shares dropped nearly 8% after a mixed earnings report and disappointing gross margin guidance. Gap's stock rose over 13% after announcing a new CEO for its Old Navy brand, which reported a 4% sales decline in Q2.

No major macroeconomic data releases were expected, but attention focused on Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium at 17:00 Israel time. Powell faces challenges amid rising long-term US Treasury yields and mixed signals from recent Fed communications. Analysts expect a hawkish tone as Powell seeks to reassure markets about inflation control without providing detailed policy plans. Market uncertainty remains high, with a 33% chance priced in for a rate hike in September.

In commodities and currencies, the Israeli shekel weakened slightly against the dollar to about 2.96. Oil prices edged higher amid stalled progress on a deal to reopen the Strait of Hormuz and US-Iran tensions, with Brent crude near $89.5 per barrel and WTI around $83. Bitcoin climbed about 3% to near $80,000 following Nvidia's earnings and favorable regulatory signals. Gold prices dipped slightly to around $1,863 per ounce, remaining below recent highs. Analysts noted a US Treasury proposal to revalue gold reserves as an unconventional financing method, which could weaken the dollar.

Overall, markets are navigating mixed signals from earnings, geopolitical risks, and central bank policy uncertainty, with technology and AI sectors leading gains amid cautious investor sentiment.