European stocks higher; tech sector boosted by impressive Nvidia results

European stock markets traded higher Thursday, with risk sentiment boosted by stellar earnings from chip maker Nvidia (NASDAQ:NVDA) as well as rising expectations soft economic data will prompt central banks to end their rate-hiking cycles.

At 03:45 ET (07:45 GMT), the DAX index in Germany traded 0.7% higher, the CAC 40 in France climbed 0.8% and the FTSE 100 in the U.K. rose 0.4%.

Stellar Nvidia results boost sentiment
Nvidia reported better-than-expected second-quarter earnings late Wednesday, and also presented consensus-beating guidance for the third quarter as the world’s most valuable chipmaker benefited from a boom in artificial intelligence development.

The stock market darling also announced a bumper $25 billion buyback program, prompting sharp gains premarket and boosting the European tech sector.

Shares of ASM International (AS:ASMI), BE Semiconductor Industries (AS:BESI), ASML Holding (AS:ASML) and Aixtron (ETR:AIXGn) were among the early gainers, rising between 2.5% and 3.5%.

Elsewhere, Hennes & Mauritz (ST:HMb) stock fell 0.5% after the fashion retailer said it will reopen most of its stores in Ukraine, beginning in November of this year.

Norwegian Air (OL:NAS) stock slumped 7% after reporting a sharp drop in net profit from a year ago, although last year’s figure had been boosted by one-off factors. The low-cost carrier also said it had begun a process that could lead to cash dividend payments for shareholders.

ECB to pause in September?
Investors have also been buoyed by the raised likelihood that the European Central Bank will pause hiking interest rates in September, as weak business activity data pointed to deepening economic pain in Europe.

German business activity contracted at the fastest pace in over three years in August, while Britain’s business activity contracted unexpectedly, raising recession risks.

“The risk that the ECB has already overtightened is significant. [Today’s] PMI release reduces the chances of a September rate hike (our base case) and increases the chance that rate cuts will come earlier than most Governing Council members thought,” said economists at Citigroup, in a note.

Central bankers convene at Jackson Hole
ECB President Christine Lagarde and Bank of England Governor Andrew Bailey are scheduled to speak on Friday at the Federal Reserve’s Jackson Hole symposium.

That said, Fed Chair Jerome Powell’s speech is likely to be the event’s highlight, with investors set to parse through his every word to figure out the next steps in monetary policy.

Crude slips on growth fears
Oil prices retreated Thursday as a series of weak PMI readings spurred concerns over slowing economic growth, likely hitting future global demand.

Data on Wednesday also showed an unexpected, substantial build in U.S. gasoline and distillate inventories over the past week, which pointed to weakening U.S. fuel demand and largely overshadowed a bigger-than-expected draw in broader crude inventories.

By 03:45 ET, the U.S. crude futures traded 0.6% lower at $78.40 a barrel, while the Brent contract dropped 0.6% to $82.72.

Additionally, gold futures rose 0.1% to $1,949.25/oz, while EUR/USD traded 0.1% lower at 1.0854.