Cryptocurrency surges, physical asset stocks stagnate... Gold and large tech stocks remain strong, with NVIDIA's performance attracting attention

The New York Stock Exchange continued its rally for the second consecutive day, with the cryptocurrency market soaring and precious metals strengthening. Investors are focused on NVIDIA’s (NVDA) earnings report released after hours.

Software stocks’ “dead cat bounce” enters its second day… Nasdaq rises over 1% for the second consecutive day

Recently, software stocks have successfully rebounded for two days amid fears of AI disruption. However, since most of the gains came from short-covering at the open, the move is more of a technical rebound rather than a true sector recovery.

The Nasdaq rose over 1% for two days in a row, marking its first sustained strong performance in two months, and reached the technical resistance level where the 50-day and 100-day moving averages converge. Large tech stocks also continued to strengthen for the second day, with major US indices including the S&P 500 and Dow Jones closing higher. However, small caps and the Dow underperformed somewhat.

Wall Street opinions diverge: “AI fears are exaggerated” vs. “Fundamental structural changes”

JPMorgan traders directly rebut recent panic reports about tech stocks. They believe that the risks of AI disruption are not new information, and market fears are overblown. Considering various computational power limitations and still-high hallucination (error) rates in AI, large-scale white-collar unemployment is unlikely to materialize before the early 2030s.

On the other hand, Goldman Sachs Delta One head Rich Privorotski offers a more cautious view. He judges that the core issue in the current market is not a battle between value and growth stocks, but a question of corporate resilience. Specifically, whether companies are producing tangible final products or profiting from inefficiencies in human systems, which is a turning point. Since AI relates to automation and friction reduction, business models relying on friction face structural risks.

‘Physical asset stocks’ pause for a couple of days… Credit market signals warning lights

Wall Street is currently paying attention to stock categories less likely to be replaced by AI—companies with physical assets like factories, infrastructure, and energy, which are less at risk of being eliminated by AI. Manufacturing, energy, utilities, and defense are typical examples. Goldman Sachs classifies these as “heavy asset, low obsolescence” themes. In short, capital is flowing into “companies that will not disappear even if AI arrives.”

These stocks have been strong in recent weeks but experienced a slight correction on the day due to the software rebound.

Meanwhile, warning signals are emerging in the credit markets. As Privorotski warns, “watch the credit market,” corporate bond markets have not followed the stock rally. Bloomberg’s Simon White notes that the structure of corporate bond holdings is shifting from banks (price setters) to ETFs (price takers). Although spreads are near historic lows, liquidity risk is increasing. The sharp decline in software stocks has also raised concerns about bad debts in the private credit sector.

The VIX (volatility index) declined for the second day in a row, but the skew index remains high, indicating that market anxiety has not fully dissipated.

Bitcoin surges 11%, is the short squeeze effect happening?

Cryptocurrency markets surged. Bitcoin jumped over 11% after the Chainalysis lawsuit, with an 8% gain on the day—the second-largest single-day increase since March 2025. The market interprets this as Chainalysis temporarily exiting the market due to litigation, with previously suppressed buy orders now erupting.

Ethereum also reclaimed the $2,000 level, hitting a two-week high.

Precious metals strengthen, dollar weakens… Gold breaks above $5,200

Gold prices rose again above $5,200, and silver broke through $91, gaining strength. Due to silver’s relative excess return, the gold-silver ratio fell to 57, its lowest in three weeks. However, after CME futures and options trading resumed late in the session, spot prices for silver and platinum experienced rapid fluctuations downward.

The dollar declined slightly, turning negative on the week.

Treasury and interest rate outlook

The Treasury market remains relatively stable, with yields rising only slightly by 1-2 basis points. However, the rate cut expectations for 2026 have been reduced from 65 basis points last week to 53 basis points, reflecting a hawkish shift.

Crude oil declined due to a large increase in inventories and easing geopolitical tensions related to Hezbollah.

Today’s biggest event: NVIDIA earnings release

All eyes are on NVIDIA’s after-hours earnings report. The stock is currently in its narrowest 60-day trading range since 2021, and the earnings release is expected to trigger significant directional moves.

According to Goldman Sachs traders, most investor types still hold NVIDIA shares. Investors may focus on its visibility for 2027, non-traditional customer demand trends, competitive landscape, and developments in China. Guidance on Blackwell and Rubin chips is also a key point to watch.