(Bloomberg) — Tech stocks bounced back from the knee-jerk selling of Nvidia Corp. as traders said the company’s results, which showed that revenue doubled in the quarter, reinforced the earnings power of artificial intelligence.
Most Read from Bloomberg
Nasdaq 100 Index futures added 0.2% after earlier sliding as much 1.4%. S&P 500 contracts also rose and Germany’s DAX Index hit a new record. Nvidia, which had tumbled sharply in trading after the close of US exchanges, was down less than 4% in pre-market trading. Intel Corp., Apple Inc. and Microsoft Corp. all posted small gains.
Subscribe to the Bloomberg Daybreak podcast on Apple, Spotify or anywhere you listen.
Nvidia, a stock that’s powered the bull market this year with a rally of more 150%, delivered a mixed picture to investors. Expectations on the stock have been lofty after its string of blowout results, and the company met or beat analysts’ estimates on nearly every measure. Revenue soared to $30 billion in the fiscal second quarter. The company said third-quarter revenue will be about $32.5 billion. While analysts had predicted $31.9 billion on average, estimates ranged as high as $37.9 billion.
“Fundamentally, market participants are reflecting on those Nvidia results and saying: they were actually pretty good,” said Michael Brown, a senior strategist at Pepperstone Group Ltd. “The bar for a beat was impossibly high, so the results don’t derail the bull case for the chipmakers or the equity market more broadly.”
The moves in US markets signaled a comeback from late Wednesday, when tech got hit after Nvidia’s sales forecast underwhelmed and it signaled that it was working through production snags with its new Blackwell chip. A $286 billion exchange-traded fund tracking the Nasdaq 100 lost 1% after the close of regular trading.
With the earnings season at an end, the focus is turning back to the macro landscape. Money markets are wagering on about one percentage point of rate cuts by year-end from the Federal Reserve, but uncertainty remains whether policy will be eased by a quarter-point next month or by 50 basis points.
The Fed’s preferred inflation gauge may firm up bets on how much and how quickly the central bank will ease policy, with the annual and month-on-month core PCE readings due Friday. Later on Thursday, weekly jobless claims data will offer a snapshot of the labor market.
Treasury 10-year yields and the dollar were steady. West Texas Intermediate crude traded near $74.
“What investors are looking for now is further confirmation that if economic momentum is weakening, the Federal Reserve are going to ride to the rescue and provide a series of substantial cuts,” said Brian O’Reilly, head of market strategy at Mediolanum International Funds.
Among other US premarket stock movers, discount retailer Dollar General Corp. slumped more than 20% after cutting its full-year sales forecast. Cybersecurity firm, Crowdstrike Inc., that was linked to a worldwide computer systems outage in July, also fell after lowering guidance.
In European markets, sentiment was boosted by Spanish inflation figures that reinforced expectations for a European Central Bank rate cut in September. Bond yields slid across the board. Germany’s DAX gained as much as 0.7%, reaching 18,912.47 points and topping its previous peak of May 15.
Key events this week:
-
Eurozone consumer confidence, Thursday
-
US GDP, initial jobless claims, Thursday
-
Fed’s Raphael Bostic speaks, Thursday
-
Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
-
Eurozone CPI, unemployment, Friday
-
US personal income, spending, PCE; consumer sentiment, Friday
Some of the main moves in markets:
Stocks
-
The Stoxx Europe 600 rose 0.7% as of 12:36 p.m. London time
-
S&P 500 futures rose 0.2%
-
Nasdaq 100 futures rose 0.1%
-
Futures on the Dow Jones Industrial Average rose 0.6%
-
The MSCI Asia Pacific Index was little changed
-
The MSCI Emerging Markets Index fell 0.1%
Currencies
-
The Bloomberg Dollar Spot Index was little changed
-
The euro fell 0.2% to $1.1093
-
The Japanese yen was little changed at 144.60 per dollar
-
The offshore yuan rose 0.6% to 7.0895 per dollar
-
The British pound was little changed at $1.3186
Cryptocurrencies
-
Bitcoin rose 1.4% to $60,166.34
-
Ether rose 0.9% to $2,560.25
Bonds
-
The yield on 10-year Treasuries was little changed at 3.83%
-
Germany’s 10-year yield declined two basis points to 2.25%
-
Britain’s 10-year yield declined one basis point to 3.99%
Commodities
-
Brent crude rose 0.4% to $78.93 a barrel
-
Spot gold rose 0.6% to $2,520.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi and Winnie Hsu.
(An earlier version corrected the date of PCE report.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
