Global share rally triggered by AI boom; UK and eurozone business activity picks up – as it happened

Blockbuster results from the US chipmaker Nvidia on the back of an AI boom last night have spread cheer in global financial markets. Japan’s traders partied like it was 1989 as the Nikkei hit an all-time closing high, beating the previous record set 34 years ago.

On Wall Street, the Nasdaq jumped 2.4% while the S&P 500 rose 1.6% and hit a record high of 5,051.37. Nvidia shares jumped 15%, adding $260bn to its market value and taking it closer to the $2 trillion mark, to $1.92trn. Other chipmakers and technology companies also rose, such as server component supplier Super Micro Computer, Advanced Micro Devices and the Cambridge-based firm Arm Holdings.

Share indices in Frankfurt, Paris and Milan have gained more than 1% and Europe’s Stoxx 600 is trading close to an all-time high, hit earlier this morning.

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Thank you for reading. We’ll be back tomorrow. Take care! – JK

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth remained solid in February.

Jobless claims in the United States fell to 201,000 in the week to 17 February after rising by 212,000 in the previous week, and defied expectations of a rise to 218,000.

The strength in the US labour market supported the Federal Reserve’s view that it’s too early to talk about rate cuts, said Fiona Cincotta, senior financial market analyst at City Index.

US companies reported further expansion in activity in February but at a slightly slower pace, with service sector growth easing a tad.

Manufacturing saw an increase in production amid an improvement in supply chains after bad weather in January, according to the flash reading of the S&P Global PMI survey.

Cost pressures eased, with input prices rising at the weakest rate since October 2020, due to lower raw material costs and competitive pricing at suppliers at both manufacturers and service firms.

However, selling prices picked up, driven by the service sector.

• Flash US PMI Composite Output Index at 51.4 (January: 52.0). 2-month low.

• Flash US Services Business Activity Index at 51.3 (January: 52.5). 3-month low.

• Flash US Manufacturing Output Index at 52.3 (January: 49.3). 10-month high.

• Flash US Manufacturing PMI at 51.5 (January: 50.7). 17-month high.

The opening bell has rung on Wall Street: the tech-heavy Nasdaq jumped just over 2% at the open to 15,920, an increase of more than 320 points.

The Dow Jones rose nearly 250 points, or 0.6%, to 38,858 while the S&P 500 gained 65 points, or 1.3%, to 5,047.

Shares in the chipmaker Nvidia leapt more than 12% to a record high in early trading, following stellar results last night that spread optimism about the AI boom, and sparked a rally in stock markets around the world. Japan’s Nikkei closed at a new all-time high.

Other chipmakers and tech stocks also rose: shares in the US-listed Cambridge chipmaker Arm rose 10.5% while San Francisco-based Super Micro Computer jumped nearly 18%.

European Central Bank policymakers agreed at their meeting last month that inflation was coming under control but indicated that any talk of interest rate cuts was premature given rapid wage growth, according to minutes of the meeting on 24-25 January in Frankfurt.

In the press conference after the decision was announced to leave borrowing costs unchanged at that time, ECB president Christine Lagarde pushed back against expectations of early rate cuts, pointing to underlying price pressures.

All in all, members signalled that continuity, caution and patience were still needed, since the disinflationary process remained fragile and letting up too early could undo some of the progress made.

While the initial inflation shock had largely reversed, the task that lay ahead was the reversal of second-round effects, which might prove to be more stubborn. At the same time, members expressed increased confidence that inflation would be brought back towards the 2% inflation target in a timely manner.

But policymakers appeared more optimistic about the outlook for inflation for years:

For the first time in many meetings, the risks to reaching the inflation target were seen as broadly balanced or at least becoming more even. At the same time, the view was also expressed that, after several years of significantly overshooting the inflation target, the costs of another overshooting were likely higher than the costs of undershooting.

The ECB governing council next meets on 7 March.

Former Sainsbury’s boss Justin King has been appointed chair by the energy company Ovo, the UK’s fourth biggest supplier of electricity and gas. He will take up the role in March, replacing Stephen Murphy, who is stepping down after nine years with the company.

King also chairs the pan-European lottery group Allwyn’s UK business, which recently took over from Camelot as the operator of the National Lottery, the first time the lottery has changed hands since its launch almost 30 years ago.

King has also held senior roles at Marks & Spencer and Asda.