Nvidia’s Earnings in Focus as US Stocks Remain Flat
Wednesday’s trading activity in U.S. stocks was minimal, as investors stayed away in anticipation of Nvidia’s earnings announcements, which are expected to provide additional insight into the AI trade, following the close.
At 09:35 ET (13:35 GMT), there was a mere 1 point increase in Dow Jones Futures, a 0.1% down in S&P 500 Futures, and a 0.1% decline in Nasdaq 100 Futures.
Nvidia’s results are expected to reveal further AI hints.
The most valuable chipmaker in the world, NVIDIA Corporation (NASDAQ:NVDA), will release its second quarter earnings after the bell. On $28.68 billion in revenue, the company is predicted to have earnings per share of $0.644, both figures up from the previous quarter.
As the company gained tremendously from rising investment in artificial intelligence, Nvidia’s shares have soared 160% so far in 2024. The company is regarded as a leading indicator of the industry for artificial intelligence (AI) and produces the most sophisticated AI chips available.
The news that AI might not be as significant a profit driver as previously believed—a theory that had caused steep declines in tech values over the previous month—also coincided with Nvidia’s earnings.
The earnings season is still ongoing.
Investors have had more earnings—even before the highly anticipated Nvidia results—to process.
The garment company, PVH (NYSE:PVH), which owns Tommy Hilfiger and Calvin Klein among its brands, revealed a decline in second-quarter sales, which sent its shares plunging 7%.
The shares of Bath & Body Works (NYSE:BBWI) dropped 5% following the chain of retail stores’ reduction of its annual sales projection, indicating a decline in demand for its high-priced items such scented candles and fragrances despite persistently high inflation.
Even after the business increased its projection for yearly sales, Abercrombie & Fitch (NYSE:ANF) stock dropped 12% as CEO Fran Horowitz warned of a “increasingly uncertain environment” as macro conditions worsened.
The department retailer exceeded projections for second-quarter earnings, which helped the company enhance its annual profit forecast. This resulted in a 4% increase in Kohl’s (NYSE:KSS) stock.
The online pet supply retailer Chewy (NYSE:CHWY) reported solid second-quarter earnings that above forecasts, which sent its shares up more than 7%.
Wall Street gains on wagers on rate cuts
However, Wall Street indexes closed at record highs on Tuesday, driven by hopes for lower interest rates, even in the face of some uncertainty about Nvidia and a rotation out of technology, particularly after Fed members adopted a dovish tone in recent remarks.
According to CME Fedwatch data, investors are now nearly fully pricing in a September interest rate cut, albeit they are divided between a 25 and 50 basis point drop.
The Fed’s favoured inflation indicator, the PCE price index data, is anticipated to provide additional hints about a possible rate cut later this week.
Expectations of a cut are also anticipated to be influenced by the unemployment claims data that is due on Thursday, particularly in light of the mounting concern that the labour market is cooling considerably faster than anticipated.
