Nvidia stock was down 2.59% yesterday, and it’s now down 7% for the month. The negativity continued this morning: the company’s shares were down a further 1.34% overnight, mostly on news that Meta was considering using Google’s chips to power its AI models. Normally, given the excess valuations that the Magnificent 7 tech companies carry, this would be a disaster for stocks. But this morning, traders are ignoring Nvidia and a global rally in stocks is underway.
S&P 500 futures were up 0.29% this morning, premarket, after the index closed up 0.91% yesterday. Markets in Asia and Europe were up across the board. Perhaps most interestingly, tech stocks that aren’t Nvidia are also holding their own—the Nasdaq Composite was up 0.58% yesterday.
Jim Reid and his team at Deutsche Bank described the buoyant mood like this: “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:
