Morning Bid: Nvidia's damp squib

By Mike Dolan

Feb 26 (Reuters) - What matters in U.S. and ‌global markets today

By Mike ​Dolan, Editor-At-Large, Finance ​and Markets

Nvidia beat the street again, but there were no market fireworks this time. After topping analysts’ revenue estimates for the latest quarter and their forecast for the next one, the AI giant's shares popped up about 3% out of hours - but they've ‌given back most of that since.

Questions about rising competition and the narrowness of the chip giant's customer base continue to ⁠rumble.

I’ll get into that and more below.

But first, check out my latest column on the key bone of contention standing in the way of deeper EU-China trade ties.

And listen to the latest ‌episode of the Morning Bid daily podcast. Subscribe ‌to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

NVIDIA'S DAMP SQUIB

The broad takeaway seems to be that Nvidia is now already well priced for the AI boom, even if the surge in overall AI infrastructure spending is clearly going up a gear.

That ​much can be seen in rallying Asia markets where big chipmakers and computing hardware sellers dominate - with the staggering rise in South Korea's Kospi index adding nearly 4% on Thursday. The Seoul benchmark is now up a whopping 50% for the year so far and has doubled in six ⁠months.

It wasn't all sweetness and light in the tech world, however. Even though the software sector at large continued its recovery on Wednesday, Salesforce fell back 4% overnight after its latest results, while HR ​software firm Workday dropped another 8% to five-year lows.

The overall S&P 500 still managed a punchy 0.8% gain on Wednesday and futures held those gains ahead of Thursday's bell. European stocks were firmer during a busy earnings day there.

Meantime, ​Japan's Nikkei pushed slightly higher as attention focused on the Bank of Japan. The ‌focus this week has been on Prime Minister Sanae Takaichi's nomination of two dovish names to the BoJ board, which some likened to the Federal Reserve independence worries in the U.S. The yen initially weakened on that news.

However, many investors ⁠have downplayed the impact of the nominations as they replace two similarly dovish policymakers, and BoJ independence from government has always been much more tenuous anyway. The yen caught a foothold against the dollar today as a result.

There's no stopping China's yuan, however. Not only does it continue to strengthen against the dollar to its best levels in ⁠almost three years, but it hit its highest in 9 months against the euro today too.

Elsewhere, energy markets turned their attention back to Geneva, where nuclear talks between the ​U.S. and Iran resume on Thursday. With betting markets still seeing more than a 50% chance of a limited U.S. military strike over the next month, crude oil prices seemed calm, helped by reports that OPEC+ was considering boosting production at its next meeting.

Chart of the day

The latest jump in South Korean shares on Thursday was led by ‌chip giants Samsung Electronics and SK Hynix after upbeat Nvidia earnings were released stateside overnight.

The Korean market surge has also been fuelled by governance reforms spearheaded by President Lee Jae Myung, and on Wednesday parliament passed a third revision ‌to the Commercial Act aimed at better protecting shareholder interests.

Today's events to watch

* U.S. weekly jobless claims (8:30 a.m. EST)

* U.S. 7-year note auction

* U.S.-Iran nuclear talks resume in Geneva

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from ‌bias.

(By Mike Dolan)

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