By Marc Jones and Gregor Stuart Hunter
LONDON/SINGAPORE (Reuters) -A relief rally lifted world stock markets on Thursday as investors cheered AI chip giant Nvidia's forecast-topping earnings, while the dollar hovered near a 6-month high as traders braced for delayed U.S. jobs data.
Asia's tech-heavy markets had led off the rally and Europe's top bourses bounded out of a 5-day losing streak [.EU] after Nvidia CEO Jensen Huang shrugged off AI bubble concerns, touting blockbuster demand for its high tech-chips.
[.EU]
The remarks were backed by the world's most valuable company's forecast quarterly revenue well above Wall Street estimates, quelling some of the AI valuation fears that have triggered a $3 trillion rout in global markets over recent sessions.
"It's fair to say that Nvidia's results have completely changed the market mood and pushed out any bubble fears for another day," Deutsche Bank strategist, Jim Reid, said.
That sentiment was echoed in major regional markets.
Europe's tech indexes climbed 1.8%, with Infineon and ASML gaining 2.8% each and AI equipment makers Schneider Electric and Siemens Energy up 2% and 4%, respectively.
Asia's gains had cooled slightly as the day progressed, but Tokyo's Nikkei 225 still finished up a hefty 2.6%, Korean stocks jumped 1.9%, and Taiwan rallied 3.2% as its big chipmaker TSMC leapt more than 4%.
Nasdaq and S&P 500 futures were up 1.7% and 1.3% too. Wall Street had already snapped a four-day losing streak on Wednesday before Nvidia's earnings release as investors positioned for a bounce.
The rebound was given additional impetus too by a Reuters report that the U.S. might delay long-promised semiconductor tariffs to help ease tensions with China.
YEN STIMULUS STRESS
Currency and bond market traders were also assessing news that Japan's Prime Minister Sanae Takaichi's administration is reportedly preparing to pass a stimulus package that would be the country's biggest since the COVID-19 pandemic.
Japan's government bonds sold off sharply, with yields surging to record highs. The yen sagged to 157.60, its weakest level in ten months, having also just set a record low against the euro. [/FRX]
The currency has weakened steadily since Takaichi was elected leader of her party, losing more than 6% of its value on unease about the scale of borrowing needed to fund her stimulus plans.
"It is going to be a crucial session going into the weekend to see if they (Japanese policymakers) can stop the bleeding here," Saxo Bank's FX strategist John Hardy said, likening the situation to the "ugly" rout on the pound in 2022 when the then Liz Truss government floated an unfunded spending drive.
The U.S. dollar index, which tracks the greenback's strength against a basket of six major peers, advanced 0.2% to 100.25, hovering close to a 6-month high.
The yield on benchmark 10-year Treasury notes edged up 1.1 basis points to 4.1406% compared with its U.S. close of 4.131% on Wednesday.
DELAYED JOBS DATA
Traders are now awaiting the release of September's delayed jobs report, due later in the global day, to provide clues on the Federal Reserve's next move.
Minutes from the Fed's October meeting released on Wednesday showed it cut interest rates even as policymakers cautioned that doing so could risk entrenched inflation and a loss of public trust in the U.S. central bank.
Fed funds futures are pricing an implied 33% probability of a 25-basis-point cut at the next meeting on December 10, down from a 50% chance a day earlier, according to the CME Group's FedWatch tool.
An updated schedule for the release of the November jobs report, now delayed until December 16, is behind the move, said Gavin Friend, senior markets strategist at National Australia Bank in London.
"That's six days after the December FOMC meeting, and that's why the 12 or 13 basis points of rate cuts that were priced in for December, 50% or so, has been immediately evaporated," he said on a podcast. From the market's perspective, he said, the data fog "plays to the Fed's messaging that 'we need to pause'."
Against the dollar, the euro was 0.2% weaker on the day at $1.1520, while in commodity markets Brent crude inched up to $63.6 per barrel having fallen over 2% on Wednesday as markets assessed the latest U.S. proposals to end the war in Ukraine and prepared for a U.S. deadline to cease operations with two major Russian oil firms.
Cryptocurrencies retraced some of their recent heavy selloffs too, with bitcoin up 1.8% at just over $92,200 and ether 1.5% higher at $3,033.
Precious metals markets were choppy, with spot gold last down 0.4% at $4,064.04 after earlier rising as much as 0.7%. [GOL/]
(Reporting by Marc Jones; editing by Saad Sayeed)
