Asian Markets Rebound Led by Taiwan; Nvidia Stock Drops 4% Overnight
Translated & summarized from Globes by baba
Asian markets, led by Taiwan, are recovering from sharp weekly losses, with Taiwan's index up nearly 5%. U.S. stock futures also rose, signaling a positive start for Wall Street after a volatile week. Nvidia's stock fell 4% overnight amid reports of a foreign espionage probe and an apology from its CEO for an affair. Analysts at Goldman Sachs suggest that extreme market panic may precede a significant recovery, citing historical data.
The story in 6 lines · by baba
- Asian markets rebound, led by Taiwan's 5% surge, recovering from sharp weekly losses.
- Nvidia stock drops 4% overnight amid espionage probe allegations against CEO Jensen Huang.
- U.S. stock futures rise, indicating a positive start for Wall Street after a volatile week.
- Goldman Sachs suggests extreme market panic may precede significant recovery based on historical data.
- Oil prices stable around $98/barrel; U.S. dollar weakens against major currencies.
- Tel Aviv's TA-35 index rebounds over 3% Friday but ends the week down 2.9%.
Asian stock markets are showing signs of recovery, with Taiwan's exchange leading the gains. This rebound follows the sharpest declines in over 18 months experienced last week, driven by concerns over potential regulation in the artificial intelligence industry after the Democratic Party's victories in the US elections. Despite reports that Nvidia's board is investigating allegations of a foreign espionage plot targeting CEO Jensen Huang, the company's stock fell approximately 4% in pre-market trading on alternative platforms. Huang has apologized to employees for an extramarital affair.
Oil prices remained stable around $98 per barrel for Brent crude. This stability comes after reports that U.S. President Donald Trump indicated a low probability of further strikes on Iran if talks with Tehran progress. The U.S. dollar weakened against major global currencies, while U.S. Treasury bonds saw slight declines.
Taiwan's stock exchange surged nearly 5%, bolstered by measures announced to curb declines and restore investor confidence, alongside a drop in oil prices. Major Asian indices also saw gains: Japan's Nikkei rose 3.25% and the Topix added 3.44%, while South Korea's Kospi increased by 1.15%. Hong Kong's Hang Seng index climbed 1%, and China's CSI 300 index gained 0.3%.
U.S. stock futures indicated a positive opening for Wall Street, with S&P 500 futures up 0.6% and Nasdaq futures up 0.7%. Last Friday, both the Nasdaq and S&P 500 recovered some ground, rising 1.1% and 0.3% respectively, though the week concluded with significant losses for the Nasdaq (-3.4%) and S&P 500 (-2.7%). This week on Wall Street will focus on earnings reports from AI infrastructure companies, including CoreWeave, Nebius, and Cerebras Systems, amid ongoing concerns about data center investments following the U.S. elections.
In Tel Aviv, the TA-35 index rebounded over 3% on Friday after a sharp 4% drop the previous day. However, the week ended in negative territory with TA-35 and TA-125 indices down approximately 2.9% and the TA-90 index losing about 3%. Dual-listed stocks are expected to return from Wall Street with a slight negative arbitrage gap of around 0.2%, with Palo Alto and Tower showing losses over 4%, while Teva, Nova, and Enlight are projected to rise about 2%. Israeli companies like Next Vision, The Tel Aviv Stock Exchange, International Bank, and Bezeq are scheduled to release earnings reports this week.
Goldman Sachs traders suggest that the recent sharp sell-off in U.S. stocks has pushed market panic to an extreme, a level historically preceding significant recoveries. The bank's "Vol Panic Index" reached 9.57 out of 10, indicating extreme panic. Historically, when this index crossed the 9.5 threshold, the S&P 500 saw an average gain of 4.6% in the following three months and 9% over six months, with an 80% and 73% success rate, respectively. While some forced selling may persist, weakening selling pressure could create investment opportunities.