Shrug for Nvidia but IPOs excite

Nvidia’s shares fell back about 1% out of hours, giving back what they’d gained during Wednesday’s trading session, ostensibly on questions around growing competition from other chipmakers. But there was no real red flag on the mega AI boom, and chipmakers across the world rallied overnight, helped by Samsung’s 7% surge after it reached an 11th-hour deal to avert a workers’ strike. The tech mood was further improved by reports that OpenAI would soon file for an IPO, news that sent SoftBank shares up almost 20% in Tokyo. And markets are braced for another trillion-dollar-plus mega-cap hitting Wall Street next month as SpaceX also filed for a long-awaited IPO on Wednesday. But the broader market mood had been lifted by sliding oil prices amid reports of several supertankers transiting the Hormuz strait, combined with hopes that a deal to end the Iran war could be back on track. Brent crude settled at around $105 per barrel on Wednesday. That saw the S&P 500 end 1% higher and Treasury yields beat a retreat, taking the wind out of the dollar’s sails in the process. Wall Street futures were up slightly before the open on Thursday, while Brent crude edged down further. Fed minutes released on Wednesday showed an increasingly hawkish central bank committee at its April meeting, wary of missing its inflation target for five years running. Thursday will see retail giant Walmart top the earnings slate, while flash business surveys for May will stream in around the world. An early release indicated that economic activity in the euro zone fell at its sharpest rate since October 2023 in May.

The scale of investment in the AI buildout is eye-popping - but the debt being raised to fund some of it is also rising sharply.