Wall Street surges and FTSE closes higher as Nvidia ignites global rally

FTSE and global markets higher as Nvidia's blowout boost tech stocks (AFP Contributor via Getty Images)

The FTSE (^FTSE) and European stocks were higher on Thursday after huge growth from chip maker Nvidia (NVDA) triggered a surge in optimism around the globe.

• London’s benchmark index rose 7,686 points to close 0.3%

• Germany's DAX (^GDAXI) rose 1.5% and the CAC (^FCHI) in Paris climbed 1.3%

• The pan-European STOXX 600 (^STOXX) rose 0.8% after touching an all-time high of 495.81 points

• Shares in the chipmaker Nvidia leapt 12% in early trading after its bumper profits triggered a race to buy-up AI-linked stocks

• Across the pond, the tech-heavy Nasdaq (^IXIC) shot up about 2.4% on the heels of the chipmaker's results, while the S&P 500 (^GSPC) jumped about 1.6%. Gains for the Dow Jones Industrial Average (^DJI) lagged, with a rise of 0.7%.

Follow along for live updates throughout the day:

LIVE COVERAGE IS OVER19 updates

• Featured

  Thu, 22 February 2024 at 3:48 am GMT-5

  Pedro Goncalves

  Nvidia reports gigantic yearly revenue growth of 265%

  

  The latest blockbuster results by semiconductor giant Nvidia have given global markets a lift (REUTERS / Reuters)

  AI darling Nvidia (NVDA) reported that revenues surged by 265% to $22bn (£17.4bn) in the three months to 28 January, compared to a year earlier.

  For the year as a whole, turnover more than doubled to $60.9bn. Nvidia also forecast a 233% jump in its quarterly revenues for the current quarter, beating analysts' estimates.

  The chief executive and company founder Jensen Huang said: "Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations."

  Nvidia shares jumped 10% in after hours trading.

  Josh Gilbert, market analyst at trading platform eToro, said: "Nvidia reasserted its place in the Magnificent 7 with another blowout quarter showing that AI use cases are exploding, and the AI boom is showing no signs of slowing down.The big question for investors is, can this continue?

  "Put simply, yes. Nvidia continues to deliver in every way, and its results show there is still plenty of growth ahead. This isn’t just a flash in the pan, nor a bubble, but a business that continues to make serious cash.Despite the risks from issues in China and ongoing competition, that can pose headwinds moving forward, Nvidia raised its guidance for the next quarter to $24bn in revenue, putting it on track to nearly $100bn in sales over the next year."

  Nvidia said gross profit for the final three months of its financial year rose by 338% to $16.8bn. Annual gross profit rose by 188% to $44.3bn.

  Read how Nvidia's Q4 earnings set the stage for further dominance

Thu, 22 February 2024 at 11:30 am GMT-5, Pedro Goncalves

That is all from us but do follow our Yahoo Finance US blog to stay on top of what's moving markets across the pond.

Hope you'll join us again tomorrow!

PHG

Diageo seeks buyer for British summer staple

Thu, 22 February 2024 at 10:46 am GMT-5, Pedro Goncalves

FTSE 100 drinks maker Diageo (DGE.L) is reportedly exploring a sale of its quintessentially English brand Pimm’s.

The company has hired bankers at Rothschild to explore a possible deal for the brand, according to Sky News.

The process is at a very early stage, and may not lead to the British-based company offloading the Pimm's business, one insider said on Thursday.

Wall Street markets leap higher as Nvidia profits surge

Thu, 22 February 2024 at 9:46 am GMT-5, Pedro Goncalves

Wall Street opens higher (Reuters / Reuters)

On Wall Street, the tech-heavy Nasdaq (^IXIC) jumped over 2.3% at the open to 15,948, an increase of more than 369 points.

The Dow Jones (^DJI) rose nearly 250 points, or 0.7%, to 38,845 while the S&P 500 (^GSPC) gained 66 points, or 1.3%, to 5,047.

Shares in the chipmaker Nvidia leapt 12% in early trading, following stellar results last night that spread optimism about the AI boom, and and sparked a rally in stock markets around the world.

The chipmaker's CEO said generative AI has "hit the tipping point" as it reported a 265% rise in revenue and laid out very upbeat guidance, a sign demand for AI hardware is booming.

AI crypto tokens surge after Nvidia results as bitcoin remains volatile

Thu, 22 February 2024 at 9:41 am GMT-5, Pedro Goncalves

Cryptocurrencies related to the artificial intelligence sector have rallied over the past 24 hours, after Nvidia exceeded expectations with its Q4 earnings on Wednesday.

According to Coingecko data, the market capitalisation for artificial intelligence (AI) tokens now stands at $17.4bn (£13.73bn), which is an increase of 6.6% in the last 24 hours. This sector of the cryptocurrency ecosystem has outperformed the general crypto market, which has risen by only 1.3% in the past 24 hours.

AI tokens associated with artificial intelligence projects, such as Fetch.ai, Singularity.net, and Render, all recorded gains in the last 24 hours. Singularity.net's AGIX token surged by over 38%, Fetch.ai's FET token saw an increase of almost 14%, and Render's RNDR token experienced a rise of over 20% during the same period.

Read the full story here

Google suspends AI image generator after creating ethnically diverse Popes and Vikings

Thu, 22 February 2024 at 8:18 am GMT-5, Pedro Goncalves

Google (GOOGL) has said it is working to fix its new AI-powered image generation tool, after users claimed it was creating historically inaccurate images to over-correct long-standing racial bias problems within the technology.

Users of the Gemini generative AI chatbot have claimed that the app generated ethnically diverse images of historical characters such as Vikings, Popes and knights.

Several examples have been posted to social media, including where prompts to generate images of certain historical figures – such as the US founding fathers – returned images depicting women and people of colour.

Google has acknowledged the issue, saying in a statement that Gemini’s AI image generation purposefully generates a wide range of people because the tool is used by people around the world and that should be reflected, but admitted the tool was “missing the mark here”.

The UK recession of late last year is possibly already over', says GAM director

Thu, 22 February 2024 at 7:53 am GMT-5, Pedro Goncalves

Charles Hepworth, investment director at GAM Investments, believes the UK might already be over last year's recession. He said:

“UK Manufacturing and Services PMI numbers came in broadly the same as the previous month’s reading with services in expansion territory at 54.3 and manufacturing still in contraction at 47.1. Services being the bulk of UK economic activity, are important leads for the overall trajectory of the UK economy.

"This pace likely indicates the UK recession of late last year is possibly already over. How the Bank of England will react to this for rate cut hopes is not that obvious. Is the Bank adopting continuing restrictive policy until inflation hits target, like the Federal Reserve, or is last year’s technical recession still on the Bank’s mind? Judging by governor Andrew Bailey’s comments to the Treasury Select Committee earlier this week, the committee may move more quickly.”

Nestlé sales slow as shoppers put off by higher prices

Thu, 22 February 2024 at 7:41 am GMT-5, Pedro Goncalves

Food and drink giant Nestlé (NESN.SW) has revealed a slowdown in revenue growth after shoppers were deterred by price hikes.

The company behind Nespresso and KitKat also revealed it has eased back on recent pricing inflation after reduced costs in its supply chain.

The Swiss consumer group said on Thursday that it saw organic growth of 7.2% in 2023 compared with the previous year, although this was caused by a 7.5% increase in pricing over the year as volumes declined.

This revenue growth was below the expectations of market analysts.

Nestlé said it expects organic growth to be slower for the current year, at around 4%, due to lower levels of price inflation.

Inflation in euro area eases to 2.8% in January

Thu, 22 February 2024 at 7:31 am GMT-5, Pedro Goncalves

The annual inflation rate in the eurozone came in at 2.8% in January, down from 2.9% registered in December but above the European Central Bank's target of 2%.

In the European Union, the consumer price index (CPI) stood at 3.1%, falling from the previous month's 3.4%, according to Eurostat, the EU’s statistical body.

Read more: Trending tickers: Rolls-Royce, Anglo American, WPP, Mercedes-Benz

The annual core inflation rate in the euro area, which strips volatile food and energy prices, eased for the 6th straight month to 3.3% in January, the lowest since March 2022, down from 3.4% in the prior month.

The lowest annual rates were registered in Denmark, Italy (both 0.9%), Latvia, Lithuania and Finland (all 1.1%). The highest annual rates were recorded in Romania (7.3%), Estonia (5.0%) and Croatia (4.8%).

Trending tickers: Rolls-Royce, Anglo American, WPP, Mercedes-Benz

Thu, 22 February 2024 at 7:25 am GMT-5, Pedro Goncalves

Mercedes-Benz results slipped (picture alliance via Getty Images)

Rolls-Royce (RR.L) - Engine-maker has said cost-cutting plans that will see it axe up to 2,500 jobs by the end of next year were “well under way” as it swung to a £2.4bn ($3.04bn) annual profit.

Anglo American (AAL.L) - The embattled miner cut its dividend after posting a 94% plunge in its annual profit and booked $2.1bn in impairments as it faces weak commodity markets across its portfolio.

WPP (WPP.L) - Advertising giant WPP is trying to capitalise on the artificial intelligence boom as its boss described its “detailed our strategy to capture the opportunities of AI”.

Mercedes-Benz (MBGYY) - Mercedes-Benz said that net profit slipped 21.5% on year to €3.16bn. Analysts expected net profit to finish the quarter at €2.80bn.

Read the full story here

No interest rate cuts anytime soon, Capital Economics warns

Thu, 22 February 2024 at 5:44 am GMT-5, Pedro Goncalves

Interest rates will not be cut soon after the PMI survey suggested that higher labour costs remained the main factor pushing up business expenses, according to economists.

Alex Kerr, assistant economist at Capital Economics, said:

The services output prices balance rose from 57.2 to 58.5, which survey respondents attributed to continued higher labour costs. This is consistent with services CPI inflation easing only gradually from 6.5% in January to just above 5.0% in six months’ time.

This will add to the Bank of England’s unease about lingering domestic price pressures. At the margin this may mean the Bank won’t rush to cut interest rates. But we still think overall CPI inflation will fall below 2.0% in April and that the Bank will be in a position to start cutting rates this summer.

Thu, 22 February 2024 at 5:41 am GMT-5, Pedro Goncalves

UK composite PMI out to its highest spread over Eurozone equivalent since Q2 2022. Consistent with economic growth picking up at the start of 2024 - albeit from a near-zero base for more than a year. pic.twitter.com/Y3Jph3pr4c

— Simon French (@Frencheconomics) February 22, 2024

ScottishPower’s supply arm saw profits soar in 2023

Thu, 22 February 2024 at 5:29 am GMT-5, Pedro Goncalves

ScottishPower saw earnings at its energy supply arm soar last year thanks to a mechanism in the price cap, but the company made a loss in the last six months of the year.

The Spanish-owned business said operating profit at the unit hit £545m in 2023, up from a £273m loss the year before.

The turnaround was purely in the first half of the year though after Ofgem allowed suppliers to claw back some of the excess costs they faced during the energy crisis. Rivals also saw their profits soar last year for that reason.

In the second half of the year, ScottishPower’s energy supply unit made a multimillion-pound loss.

UK private sector growth hits nine-month high

Thu, 22 February 2024 at 4:38 am GMT-5, Pedro Goncalves

Activity in the UK’s private sector has this month expanded at its fastest rate since May last year as the services sector continued to grow.

The closely followed S&P Global/CIPS flash UK purchasing managers’ index (PMI) rose to 53.3 in February, up from 52.9 the month before.

The flash figures are based on preliminary data. Any score below 50 is said to show that the sector is contracting.

Economists had forecast the PMI would hit 53.0, according to a consensus provided by Pantheon Macroeconomics.

WPP slumps despite £450m cost-cutting drive

Thu, 22 February 2024 at 3:41 am GMT-5, Pedro Goncalves

Advertising giant WPP (WPP.L) is trying to capitalise on the artificial intelligence boom as its boss described its “detailed our strategy to capture the opportunities of AI”.

However, it revealed a sharp fall in profits as sales in its US business continued to slow as it restructured its agencies to cut costs.

Shares have fallen as much as 1% in early trading after pre-tax profits plummeted by 70% to £346m for the whole of 2023, despite bosses saying they had managed around £475m of gross savings in 2023, which is ahead of the originally planned £450m.

Wall Street overnight

Thu, 22 February 2024 at 3:37 am GMT-5, Pedro Goncalves

My colleague Karen Friar gives us a snapshot of the US markets close overnight. She writes:

US stocks rallied late in the day on Wednesday as investors counted down to high-stakes earnings from AI darling Nvidia (NVDA) and digested the release of Federal Reserve minutes which reiterated the central bank's focus on not cutting interest rates too soon.

The S&P 500 (^GSPC) rose more than 0.1%, while the Dow Jones Industrial Average (^DJI) popped about 0.1%, or almost 50 points. The tech-heavy Nasdaq Composite (^IXIC) led the way lower, down 0.3% on the heels of Tuesday's declines.

Japanese shares hit all-time highs on AI boom

Thu, 22 February 2024 at 3:34 am GMT-5, Pedro Goncalves

Passersby stand in front of electronic screens displaying Japan's Nikkei share average, which surged past an all-time record high scaled in December 1989, outside a brokerage in Tokyo, Japan February 22, 2024. REUTERS/Issei Kato (Reuters / Reuters)

Japan's main stock index has hit an all-time closing high, surpassing the previous record set 34 years ago.

The Nikkei 225 (^N225) rose 2.19% on Thursday to end the trading day at 39,098.68.

Tsutomu Yamada, senior market analyst at Abu Kabucom Securities in Tokyo, told Reuters: "For us traders, this markets the arrival of a new era. It feels like the stock market is telling us that we’ve finally escaped from deflation and a new world has opened up."

Markets around the globe surged on optimism about the AI boom spread by bumper results from the US chipmaker Nvidia (NVDA).

The 34 years it has taken to regain its footing is a decade longer than it took Wall Street to recoup losses from the 1929 crash and Great Depression.

Lloyds Bank posts record profit amid higher interest rates

Thu, 22 February 2024 at 3:27 am GMT-5, Pedro Goncalves

Lloyds Banking Group reported a 57% jump in annual profit for 2023 as it generated more income from higher interest rates that continue to squeeze most UK households.

The lender reported a pre-tax profit of £7.5bn ($9.5bn ) over 2023, surging by 57% compared with the £4.8bn made in 2022.

The group – which includes Halifax, Bank of Scotland and Scottish Widows – announced a final dividend of 1.84 pence and a share buyback of £2bn. Lloyds net interest margin – the difference between what it charges for loans and pays out on savings – rose 17 basis points to 3.11%.

Read the full story here

Rolls-Royce cost-cutting overhaul ‘well under way’ as it swings to £2.4bn profit

Thu, 22 February 2024 at 3:16 am GMT-5, Pedro Goncalves

Engine-maker Rolls-Royce (RR.L) has said cost-cutting plans that will see it axe up to 2,500 jobs by the end of next year were “well under way” as it swung to a £2.4bn annual profit.

The aerospace engineering specialist reported the statutory pre-tax profits for 2023 against losses of £1.5bn in 2022, boosted by cost savings and better-than-expected revenues.

Underlying operating profits more than doubled to £1.6bn for 2023, up from £652m the previous year, as revenues jumped 22% to £16.5bn

Rolls said it had already delivered around £150m of its £400m to £500m cost savings target announced in October, when it revealed that between 2,000 to 2,500 roles would go as part of the plans.

Watch: How Nvidia's Q4 earnings set the stage for further dominance

Download the Yahoo Finance app, available for Apple and Android.