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Strong Nvidia Earnings Fail to Boost US Markets
US stocks suffered a slide on Thursday, marking the Dow Jones Industrial Average’s worst performance in 2024, as a post-earnings rally from Nvidia failed to lift broader market sentiment.
The Dow fell 1.53 percent to close at 39,065.26 in the lowest session of the year. Boeing emerged as the biggest drag on the Dow, plunging 7.6%. Meanwhile, the S&P 500 fell 0.74 percent to settle at 5,267.84, and the Nasdaq Composite fell 0.39 percent to close at 16,736.03.
Earlier in the day, both the broad market index and the technology-focused benchmark index hit record highs. Nvidia, a leading chipmaker and artificial intelligence company, rose 9.3%, pushing its shares above $1,000 after reporting robust fiscal first-quarter results and announcing a 10-for-1 stock split.
Nvidia’s fiscal Q2 revenue projection of approximately $28 billion also exceeded LSEG’s consensus forecast of $26.61 billion, indicating sustained momentum for the company. Analysts forecast earnings of US$5.95 per share in the final result.
Wall Street has closely monitored Nvidia’s performance, seeking reassurance that enthusiasm around artificial intelligence remains strong. With a market capitalization of over $2.5 trillion, Nvidia significantly influences the broader S&P 500.
However, despite Nvidia’s excellent performance, most stocks in the broader market index turned negative on Thursday, signaling a lack of market breadth. More than 400 stocks in the S&P 500 registered declines, with only the information technology sector recording gains during the day.
Additionally, stronger-than-expected economic data dampened the market rally as investors reassessed the likelihood of a rate cut in September. May data for services and manufacturing exceeded economists’ expectations, according to surveys of purchasing managers by S&P Global released on Thursday. Initial unemployment insurance claims in the week ending May 18 totaled 215,000, below the 220,000 predicted by economists consulted by Dow Jones. These results have raised concerns among investors that the Federal Reserve may delay interest rate cuts.
Traders are currently pricing in just a 51% probability of a rate cut at the September Fed meeting, down from 58% the day before and nearly 68% the week before, according to the CME FedWatch tool. A probability of less than 60 percent suggests that a rate cut is no longer considered likely by the Fed.
As for US sectors, they all closed lower overnight except the technology sector, which closed 0.6% higher. Consumer Discretionary performed the worst.
Futures
SPI futures point to a drop of 1.1%.
Coin
One Australian dollar at 7:45am was buying 66.06 US cents.
goods
Gold lost 2.55%. Silver fell 3.80%. Copper fell 1.57%. Oil lost 0.64 percent.
Figures around the globe
European markets closed mixed. London’s FTSE fell 0.37 percent, Frankfurt rose 0.06 percent and Paris closed 0.13 percent higher.
Turning to Asian markets, Tokyo’s Nikkei rose 1.26 percent, Hong Kong’s Hang Seng fell 1.70 percent, while China’s Shanghai Composite closed 1.33 percent lower.
Yesterday, the Australian share market closed 0.46 percent lower at 7,811.80
Ex-dividends
No card (ASX:CDD) you are paying 10 cents without deductible
Whitefield Ind. (ASX:WHF) is paying 10.25 cents fully franked
Dividends payable
Prestal Holdings Ltd (ASX:PTL)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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