Market Update: NVIDIA and AI Stocks Lead Nasdaq Composite to Big Gains

China came into today as the top-performing market in the world in 2024 thanks to recent gains. However, today that trend is reversing. The iShares MSCI China ETF (Nasdaq: MCHI) is down 10.8% today.

Levered China ETFs are seeing even more dramatic moves. The Direxion Daily FTSE China Bear 3X Shares (NYSE: YANG) ETF is up 35.4% as it inversely tracks the performance of Chinese stocks.

Technology stocks continue extending their gains as of 11:15 a.m. ET. NVIDIA (Nasdaq: NVDA) is now up 3.82%. As we noted earlier, bullish Wall Street notes about the demand for the company’s next-generation Blackwell platform are the primary driver of returns today.

24/7 Wall St. recently purchased shares of NVIDIA as part of our $500,000 AI portfolio on the thesis that Wall Street is still dramatically underestimating demand for the company’s 2025 earnings potential. That thesis appears off to a good start.

Citi joined the parade on Wall Street banks issuing research notes on NVIDIA today. The company’s analyst covering NVIDIA – Atif Malik – is maintaining a $150 price target on the company.

Here fears that margins will disappoint investors in the near term as the company ramps Blackwell. In the longer run he sees 40% growth next year in data center capital expenditures and sees AI being in the 3rd/4th inning, with the growth of agents being the primary force driving the next wave of AI growth.

As we noted in a previous update, Chinese stocks are plunging today after the government gave few specifics on their stimulus program at a Beijing press conference earlier today.

While ETFs tracking Chinese stocks are down anywhere from 8 to 11% today, the damage has spread to some U.S. companies as well. For example, gambling stocks rely on Chinese consumers and many have exposure to Chinese markets as well. MGM Resorts (NYSE: MGM) is down 2.63% today.

Another area of market weakness today is material stocks that are counting on a rebound in China to see strong 2025 earnings. Freeport-McMoRan (NYSE: FCX) is down 5.16% today on Chinese growth fears.