Nvidia's Strong Earnings Propel Tech Stocks Amid Inflation Concerns

Nvidia Corp. delivered another strong quarterly update that exceeded analyst expectations, sending its shares up nearly 5% in overnight trading and reinforcing investor confidence in the sustained demand for artificial intelligence technology.

AI Demand Powers Results

The chipmaking giant reported that its data center revenue more than doubled over the past year and projected sales growth of 70% for 2027, according to a Reuters report. The positive sentiment was amplified by reports that Nvidia is considering a $13 billion acquisition of AI platform Hugging Face.

The enthusiasm for AI-related stocks extended beyond Nvidia. Other key tech firms also posted upbeat results:

• Salesforce (CRM): Shares jumped more than 10% in pre-market trading after the business software firm beat estimates.
• CrowdStrike (CRWD): The cybersecurity company also saw its stock rise over 10% on strong earnings.

This momentum rippled through global markets, lifting South Korea's chip-heavy KOSPI index by 1.5%. However, Japan's Nikkei index dipped slightly, weighed down by a decline in shares of Nvidia supplier Advantest.

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Inflation Data and Fed Watch

Away from corporate earnings, the latest U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, came in slightly hotter than anticipated. The annual headline rate was reported at 3.7%, with the core rate at 3.3%.

The release comes as Fed officials gather for their annual economic symposium in Jackson Hole, Wyoming. The persistent inflation, partly driven by rising memory chip prices, offers a complex backdrop for policymakers as they deliberate on the future path of interest rates.

Other Market Developments

In other corporate news, Meta Platforms agreed to a settlement of up to $18 billion over the next decade to resolve claims that it designed its social media platforms to be addictive to children. In commodity markets, oil prices continued to decline amid news of diplomatic talks between Iran and Oman aimed at managing the Strait of Hormuz.