By Danilo Masoni and Stella Qiu
MILAN/SYDNEY, Nov 11 (Reuters) – Stocks rose on Wednesday as investors beat rising expectations of another Federal Reserve interest rate hike and focused on a fresh wave of AI optimism after strong results from AI infrastructure company CoreWeave.
European stocks rose, lifting the pan-European STOXX 600 index 0.4% by 0924 GMT and leaving it close to its August record, while technology stocks led gains across Asia.
Nasdaq futures jumped 1.6% and S&P 500 futures jumped 0.7% after CoreWeave said it expected to become profitable in 2028, easing concerns that demand would not be strong enough to support the company’s debt-fueled expansion.
Its shares rose 16% in U.S. premarket trading.
“The results confirm that demand for AI remains very strong,” said Alberto Conca, CIO of Swiss wealth manager LFG+ZEST. “However, CoreWeave still faces significant questions about the sustainability of its debt burden.”
MSCI’s broadest index of Asia-Pacific shares jumped 1.5% for a third straight day of gains, helped by a 2.6% rise in South Korea and 3.6% in Taiwan. The Japanese Nikkei rose 1.3%.
Conca said the stock rally extends beyond the AI-related stocks that have driven markets higher in recent years, with “value sectors and Europe seeing new interest.” He added that earnings growth remained robust enough to support stocks despite valuation pressure in parts of the AI sector.
Investors were also watching Anthropic, which continues its listing at a valuation of $1.4 trillion, setting up a key test of Wall Street’s confidence in the AI boom.
Nvidia shares rose in premarket trading after two days of steep losses that erased $430 billion. Its CEO, Jensen Huang, is under investigation following reports that he was the target of a foreign intelligence operation linked to a suspected Chinese spy.
50 BP HIKE IN GAME
Data released Tuesday showed core inflation in the United States settled at a monthly rate of 0.3% in October, higher than the forecast of 0.2%. Before the data was available, Fed Governor Christopher Waller said a base rate of 0.3% would prompt him to consider a 50 basis point rate hike at the next meeting in December.
Dallas Fed President Lorie Logan said two more rate hikes were needed, and Chicago Fed President Austan Goolsbee warned of a “real inflation problem,” while Philadelphia Fed President Anna Paulson called for gradual rate hikes.
The chorus of hawkish rhetoric sent federal funds futures tumbling, with a quarter-point move in December now essentially locked in and a 10% risk of a 50 basis point hike. In total, three quarter-point moves will be fully integrated by the middle of next year.
Gn bussni
