This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
What To Note Today
S&P and Nasdaq gains back-to-back
Monday saw a majority increase in U.S. stocks, with the S&P 500 and Nasdaq Composite rising for the second consecutive day. Nvidia, the darling of artificial intelligence, closed at a record high. On Tuesday, Asia-Pacific markets saw a general increase. Japan’s Nikkei 225 rose more than 2% due to the tech stock rise, but Hong Kong’s Hang Seng index fell about 1.9% after it was revealed that some companies had been added to a list of “Chinese military companies” by U.S. authorities.
Tencent on the List of “Chinese Military Companies”
Following the U.S. Department of Defence’s inclusion of Tencent Holdings on a list of “Chinese military companies,” the company’s Hong Kong-listed shares fell 7% on Tuesday. The list was expanded to include CATL, a battery manufacturer that supplies Tesla and Ford. In response, Tencent said being on the list was “clearly a mistake.”
Nippon Steel is still looking for a contract
On Monday, U.S. Steel and Nippon Steel declared that they had filed two lawsuits against the U.S. President Joe Biden administration for preventing the Japanese company from purchasing the American steelmaker for $14.9 billion. Eiji Hashimoto, the chairman and CEO of Nippon Steel, reaffirmed his company’s pursuit of the purchase during a press conference on Tuesday.
Nvidia unveils new AI-ready graphics chips
On Monday, Nvidia unveiled new graphics chips for PCs at CES, the consumer electronics conference. These chips utilize the same Blackwell architecture as the company’s fastest AI processors for servers and data centers. Wall Street is more excited about Nvidia’s AI business than the company’s early days as a game chip manufacturer.
Foxconn proves AI is still popular
In a statement released on Sunday, Foxconn, a firm that trades under Hon Hai Precision Industry, reported that its fourth-quarter sales were the greatest in the company’s history for that time frame, growing 15% year over year. According to Foxconn’s data, artificial intelligence is still popular.
ETFs surpass the S&P in performance
In 2024, U.S. stocks enjoyed a spectacular year. Simply purchasing an exchange-traded fund that tracks the S&P would have yielded more than 20% returns for passive investors. However, a small number of actively managed funds sold in Europe outperformed that increase; one ETF returned 30%.
Bottom Line
On Monday, semiconductor stocks surged due to positive news about the artificial intelligence industry.
Growth in its cloud and networking products, including AI servers like those made by Nvidia, helped Foxconn record fourth-quarter sales.
Following Microsoft’s declaration on Friday that it intends to invest $80 billion in fiscal 2025 to construct data centres capable of handling AI workloads, the electronics manufacturer released a stellar earnings report.
According to such reports, businesses are still making significant investments in AI, and the top has yet to be reached.
Nvidia’s stock surged 3.4%, marking their third consecutive day of gains, to close at a record $149.43, riding on these tailwinds. During prolonged trading, the company’s shares increased even further and are now trading above $150.
The VanEck Semiconductor ETF increased by over 3% overall.
These actions contributed to the advancement of major averages. The S&P 500 increased 0.55%, but the tech-heavy Nasdaq Composite was the clear winner, rising 1.24%.
The Dow Jones Industrial Average, however, fell 0.06%. Following reports that Trump could lower his import duties, which would have benefited its component blue-chip companies, including those in the consumer discretionary sector, the index lost earlier gains.
The outlook for the coming year remains uncertain despite Monday’s encouraging market movements and optimistic news.
The market is now quite bullish on technology, anticipating 20% earnings growth this year as opposed to the market’s 12.8% growth. However, according to Sam Stovall, chief investment strategist at CFRA Research, valuations seem restricted.
Therefore, rather than merely raising the cost of the industry’s picks and shovels, the real test for AI will be whether businesses can use technology to increase revenue.
