The cost of insuring euro credit against default using credit default swaps rises as appetite for risk declines following Nvidia’s earnings. The company’s earnings were stronger-than-expected but gross margin fell slightly. “The negative market reaction to Nvidia’s results suggests investors are now focusing on the minutiae rather than the big picture,” AJ Bell’s Dan Coatsworth says in a note. The iTraxx Europe Crossover index which tracks euro junk bond credit default swaps rises 4 basis points to 308bps, S&P Global Market Intelligence data show. The iTraxx Europe Main index which tracks euro investment-grade CDS climbs 1bp to 58bps.

Nvidia reported another strong quarter but there are two red flags, Swissquote Bank’s Ipek Ozkardeskaya writes in market comments. The artificial-intelligence chip maker’s gross margin slipped to 74.6% in the third quarter from 75.1% in the second quarter, Ozkardeskaya notes. Nvidia’s next-generation AI chips, known as Blackwell, are in high demand from customers like Microsoft, Google, Meta and Elon Musk’s xAI. However, these companies will be done buying chips on a large scale at some point, Ozkardeskaya says, and Nvidia will need to find new clients.

Semiconductor stocks have gotten hit too hard. The time has come to jump in and buy. The VanEck Semiconductor Exchange-Traded Fund has fallen 14% to $241 from the record high it hit in mid July, while the S&P 500 has kept on rising. Now, much of the risk that demand for chips could be hurt as a result is reflected in the stocks’ prices. The ETF is trading close to the range of about $215 to $240 where it has found support all year. Investors keep buying the stocks, recognizing that chip makers’ profits earnings are likely to continue to rise over the long term. Chip stocks are “oversold,” wrote Jeff deGraaf, head of technical research at Renaissance Macro Research, in a note on Monday. The semiconductor ETF now trades at 26 times the earnings per share analysts expect the fund’s companies to deliver over the coming 12 months. That

Nvidia’s Blackwell AI chips are experiencing overheating problems when connected to server racks designed to hold up to 72 chips, reported The Information, citing Nvidia employees working on the problem and customers and suppliers familiar with the situation.