Software roars back as Nvidia's read-through lifts a narrow tape

• US (closed): S&P 500 +0.72% at 7,730.99; Nasdaq Composite +1.57% at 26,541.35; Dow Jones Industrial Average +0.20% at 53,569.44.
• Europe (closed): CAC 40 -1.41% at 8,319.87 was the laggard; FTSE 100 -0.86% at 10,792.54; Euro Stoxx 50 -0.48%. The DAX bucked it, +0.38% at 26,367.24.
• Asia (closed): KOSPI +2.52%, Shanghai Composite +1.73%, Taiwan Weighted +1.78%, Nikkei 225 +0.42%, Hang Seng +0.21%.

The day belonged to enterprise software, and the trigger was Nvidia's results the previous evening: a chip cycle still accelerating gave investors licence to re-rate the application layer that consumes it. Salesforce closed 22.58% higher and CrowdStrike 20.50%, Okta 28.63%, Veeva 15.20%, Synopsys 13.39% and Palo Alto Networks 12.83%. Each beat and, more importantly, guided up — dismantling the argument that AI assistants would eat seat-based software revenue rather than expand it. Nvidia itself added 8.74%.

That was the whole of the US advance. Technology gained 3.16% while all ten other sectors fell, staples worst at -1.38%. An index up 0.72% on one sector rising is not a broad risk appetite; it is a crowded conviction trade.

Europe moved on something entirely separate. French banks led Paris lower — Société Générale -4.99%, BNP Paribas -4.79%, Crédit Agricole -3.97% — on budget and political uncertainty ahead of a Fitch review of France's rating. Because domestic banks hold large books of their own government's debt, a sovereign wobble hits their capital directly, which is why the CAC underperformed the DAX by nearly two points. SAP's 5.48% gain kept Frankfurt green on the same software read-through.

Volatility sellers had the better of it: the VIX ended 4.6% lower at 14.51, and rates volatility barely stirred, the MOVE index up 0.6% at 69.86. But conviction was thin beneath the surface — across PrimerIQ's US universe, 2,691 names rose against 3,062 that fell, an advance-decline ratio of 0.88 on a day the S&P 500 gained 0.72%. Our US sector medians tell the same story: Technology +1.82% against Consumer Cyclical -1.36%.

The haven complex was not sounding an alarm, but nor was it being abandoned. Gold is trading 1.09% higher at $4,648.50, the dollar index is a touch softer at 99.105, and Treasuries went almost nowhere — the 10-year yield closed 0.8bp higher at 4.672%. Copper, up 1.37% and now within 1% of its 52-week high, remains the cleanest cyclical signal on the board.

Nothing in the data challenged the rally. Initial jobless claims came in at 203,000 against expectations near 208,000, with continuing claims at 1.778 million, also below forecast — a labour market that is cooling only very gradually. Kansas City Fed president Jeff Schmid struck the hawkish note of the day, arguing that inflation is still too hot and that policy remains accommodative.

The real test is tomorrow. Fed chair Kevin Warsh delivers his first Jackson Hole keynote at 10:00 ET (15:00 BST) on Friday 28 August, his most consequential communication since taking the chair. Also on Friday, Fitch is scheduled to review France's sovereign rating — the event Paris spent today positioning for.

The reactions that mattered had all landed before the opening bell: Salesforce, CrowdStrike and Okta each beat and lifted guidance, and each was rewarded with a move north of 20%. Sentiment was not uniform — Burlington Stores fell 7.64% and Hormel Foods 10.25%, a reminder that the consumer names reporting this week are being marked down as sharply as software is marked up. After the close, Marvell reported a second quarter ahead of its own guidance on accelerating data-centre growth, and the shares eased in extended trade — a high bar, not a bad number.