EU stock markets rise on the back of quarterly results, whilst the tech sector is weighed down by the turmoil at Nvidia. Technoprobe falls in Milan

(Il Sole 24 Ore Radiocor)- After a cautious start, the European stock markets appear to be heading upwards, currently unaffected by the sharp fall in Nvidia Corp on Wall Street, which is recording a sharp fall in pre-market trading. The prospect of a possible departure of Jensen Huang from his role as chief executive of the company has triggered a new stress test for the artificial intelligence sector, with the Santa Clara giant’s shares falling sharply in US after-hours trading and Asian stock markets in negative territory. Thus, the FTSE MIB in Milan is trading higher; the same story for the DAX 40 in Frankfurt and the CAC 40 in Paris.

On the macroeconomic front, attention is focused on the weekly claims for unemployment benefits in the United States,a useful indicator for assessing the health of the US labour market. The figure takes on particular significance for the Fed, following October’s higher-than-expected rise in inflation, which has fuelled speculation about a rate rise in December. According to the CME FedWatch Tool, the probability of a 25-basis-point rise currently exceeds 90 per cent, whilst over 9 per cent of the market is pricing in a 50-basis-point hike. Meanwhile, in its Economic Bulletin, the ECB reiterates that the Governing Council remains well positioned to deal with the current high level of uncertainty and will continue to determine the appropriate monetary policy stance on the basis of the data and on a meeting-by-meeting basis, without committing in advance to a particular path for interest rates. Meanwhile, the growth outlook for the euro area remains highly uncertain, particularly due to the geopolitical situation, the lingering energy shock and volatility in global bond markets. The ECB cites further disruptions to energy supplies and a resurgence of trade tensions as risks. Further supply problems could lead to more severe and prolonged rises in energy prices, weighing on real incomes, spending and investment.

The technology sector is once again in the spotlight. The prospect of Jensen Huang potentially stepping down as CEO of Nvidia has triggered a fresh stress test for the artificial intelligence sector, with the Santa Clara-based giant’s share price, as mentioned, falling sharply in US after-hours trading. According to the Wall Street Journal, the board of directors is reportedly considering removing CEO Jensen Huang. The matter is said to be linked to two alleged extramarital affairs, one with a woman suspected of being a Chinese spy, and the other with a company employee. According to the newspaper, the board could meet as early as today to discuss the future of the group’s chief executive. His potential departure would mark the end of an era for Nvidia, the undisputed leader of the global artificial intelligence boom. Under Huang’s leadership, the company has become one of the leading players in the global technology industry and a key player on the geopolitical stage as well. Speculation about a change at the top is therefore fuelling uncertainty amongst investors, who are concerned about the possible repercussions on the company’s strategy. Should Huang step down, it would ultimately usher in a delicate phase for Nvidia, which would then have to identify new leadership. ‘The latest developments concerning Nvidia could weigh on sentiment across the entire artificial intelligence sector. However, we believe that selective opportunities may emerge amongst semiconductor manufacturers capable of offering credible alternatives as a second source of supply for the key chips used in AI,” said Gary Tan, portfolio manager at Allspring Global Investments.

Meanwhile, the quarterly results season continues on the Milan Stock Exchange, where Telecom Italia . Poste Italiane has released its results, showing growth in revenue and profits, and confirming its upwardly revised guidance for the full 2026 financial year on a stand-alone basis. The spotlight is on the tech sector, which is feeling the impact of the Nvidia turmoil with Technoprobe (which also released its half-year results yesterday) and Stmicroelectronics, which are slipping to the bottom of the list. All eyes are also on Snam, which released its nine-month results yesterday. Banks are performing poorly, with Banco Bpm in the spotlight on the day of the pact meeting to discuss the letter received from the French regarding the ‘friendly’ merger with the Italian subsidiary. One possibility is that the board will immediately appoint advisers to begin analysing the dossier, which is currently missing several key figures (most notably the exact share exchange ratio, given that Agricole Italia is not listed).

In the currency markets, the dollar continues to strengthen, with the euro/dollar exchange rate at 1.1077 (down from 1.1095 yesterday) and the dollar/yen at 159.83 (down from 159.85). The single currency is also trading at 176.98 yen (down from 177.34). On the energy front, oil prices have remained largely unchanged, with Brent down slightly to around $92 per barrel and WTI at around $85.24. Gas prices in Amsterdam are moving in the opposite direction, remaining firmly above €89 per megawatt-hour. This is being driven by low storage levels in Europe (with the exception of Italia, which has reached and exceeded its 90 per cent filling target), which are at their lowest in over ten years, and the freezing temperatures. Finally, gold futures are down, having fallen once again below $4,000 an ounce, as inflation fears have fuelled expectations of an interest rate rise.