Nvidia stock was down 2.59% yesterday, and it’s now down 7% for the month. The negativity continued this morning: the company’s shares were down a further 1.34% overnight, mostly on news that Meta was considering using Google’s chips to power its AI models. Normally, given the excess valuations that the Magnificent 7 tech companies carry, this would be a disaster for stocks. But this morning, traders are ignoring Nvidia and a global rally in stocks is underway.
S&P 500 futures were up 0.29% this morning, premarket, after the index closed up 0.91% yesterday. Markets in Asia and Europe were up across the board. Perhaps most interestingly, tech stocks that aren’t Nvidia are also holding their own—the Nasdaq Composite was up 0.58% yesterday.
Jim Reid and his team at Deutsche Bank described the buoyant mood like this: “The 3-day advance for the S&P since Thursday’s low stands at +3.47%, which is the strongest 3-day move since the U.S.-China tariff reduction back in May and leaves the index less than 2% from its all-time high. The U.S. equity advance was broad-based, with the small cap Russell 2000 up +2.14% and the equal-weighted S&P 500 up +1.45% on the day.”
Why the good cheer? Five main factors:
First, companies in the S&P are actually doing quite well. With 95% of them having reported Q3 results, “earnings per share (EPS) growth is tracking over 13% … cruising past the 7.4% consensus forecast,” according to LPL Financial analysts Jeffrey Buchbinder, Adam Turnquist, and Brian Booe. “S&P 500 revenue grew 8.4%, an atypically strong 2.5% above expectations at quarter-end.”
That good fortune is reflected in the private markets, too. Lincoln International—which tracks the private credit market—told Fortune that 68% of companies in its database grew their revenue over the preceding 12 months, and 62% grew their adjusted earnings before interest, tax, depreciation, and amortization (Ebitda). Revenue was up an average of 6.5% in the 12 months through Q3 2025; Ebitda was up 5.4%.
The VIX “fear” index, which measures volatility, has declined 23.08% over the last five days, suggesting that stock investors have stopped being scared that an AI bubble will derail market momentum.
JPMorgan set a new target for the S&P for the end of 2026: 7,500, projecting “above-trend earnings growth of 13-15% for at least the next two years,” Dubravko Lakos-Bujas and his team told clients this morning.
And finally, it’s looking more and more likely that the U.S. Federal Reserve will cut interest rates again in December, delivering a new round of cheaper money, according to the CME’s Fedwatch tool, which currently rates the possibility of a cut at 84%.
Nvidia, in other words, is a fly in the market’s soup, but the soup still tastes pretty good. (Don’t cry too many tears for Nvidia investors, by the way, its stock is still up 32.41% year to date.)
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
S&P 500 futures were up 0.29% this morning. The last session closed up 0.91%. STOXX Europe 600 was up 0.45% in early trading. The U.K.’s FTSE 100 was up 0.25% in early trading. Japan’s Nikkei 225 was up 1.85%.China’s CSI 300 was up 0.61%. The South Korea KOSPI was up 2.67%. India’s NIFTY 50 is up 1.24%. Bitcoin was at $86K.
