Wall Street is a simple story ahead of key economic data
Wall Street on Thursday became a tribe of important economic data related to the labor market, including weekly data, local data (adjusted), and the consumer price index. In the meantime, they are watching Nvidia’s results, which beat expectations, but investors’ expectations were not fully met. More corporate earnings are also expected during the session, as well as an interview with Vice President Kamala Harris.
Nvidia’s guidance prompts a heavy sell-off: Nvidia (ticker NVDA) beat quarterly expectations, but there is only weak incentive for investors to enter after-hours play. It reported earnings of $0.68 billion per share and totaled $30.04 billion, beating expectations of $0.64 and $28.68 billion for the three months ended July 28. The company also learned about its $50 billion share buyback program.
The strong quarterly results represented a 154% jump in active data centers, to $26.27 billion, compared to the same period last year. However, nearly 7% of the participants participated in after-hours gaming, and they lost $200 billion from the market, due to the current quarter’s revenue guidance of about $32.5 billion, which some are referring to.
The improvement in growth compared to previous earnings also slowed. Nvidia also pointed to some difficulties in its advanced AI product line, Blackwell, despite its confirmation of its allocation in the fourth intelligence. The growing demand for Nvidia’s AI chips helped push its market cap past $3 trillion for several quarters, leading to a significant increase in the market cap to over $3 trillion, making it the world’s most valuable company in June.
Nvidia’s stock rally and its impact on futures
Nvidia’s stock has surged more than 150% this year, thanks to the growing demand for generative AI. However, the big drop in its stock could turn into another buying opportunity, as the company remains a major interest.
Futures mixed; Nvidia weighs on tech sector: US stock futures were mixed on Thursday, with Dow futures showing a gain of 155 points, or 0.4%, at 04:05 ET (08:05 GMT). In contrast, S&P 500 futures were slightly lower, while Nasdaq 100 futures were down 30 points, or 0.2%. Nasdaq futures were notably affected after Nvidia’s results failed to meet high expectations, despite beating expectations on both the top and bottom lines.
Nvidia shares fell about 7% in premarket trading as the company failed to impress investors. With Nvidia’s results over, investors’ attention now turns to the strength of the US economy and its potential impact on the Federal Reserve’s monetary policy. Initial jobless claims, pending home sales and the latest second-quarter growth data are due during the session.
The widely watched personal consumption expenditures price index for July will also be released on Friday. In addition, investors will get a chance to study the quarterly results of some prominent consumer companies such as Dollar General (NYSE: DG), Ultra Beauty (NASDAQ: ULTA), Lulu Beauty (NASDAQ: LULU), and Best Buy (NYSE: BBY). Elsewhere, Salesforce (NYSE: CRM) and CrossStrike (NASDAQ: CRWD) will be in the spotlight after the companies released their results after the close on Wednesday.
Apple Expects iPhone Sales to Soar Thanks to AI
Apple (NASDAQ: AAPL) was seen ordering components for significantly more iPhones than a year ago, indicating the company is ready to boost sales driven by AI. Apple ordered components and parts for between 88 million and 90 million iPhones, the Nikkei reported. That compares with initial component orders of around 80 million.
The company is preparing to unveil the latest version of its flagship phone, the iPhone 16, in early September. It will also begin rolling out a slew of AI features to its devices. These increased requests may point to analysts’ expectations that AI will help boost iPhone sales, which have been steadily declining over the past year.
Kamala Harris prepares for CNN interview
Kamala Harris will sit down with her deputy, Tim Walz, for an interview with CNN later Thursday. It will be her first interview since becoming the Democratic nominee in late July after President Joe Biden ended his reelection campaign. While Harris has fielded a few questions from reporters about foreign and economic policy during her campaign, she has yet to conduct a one-on-one media interview or hold a formal press conference.
Harris laid out some broad policy agendas at the Democratic National Convention last week, promising to cut taxes for the middle class and promote a strong foreign policy to confront Russia and North Korea. This interview could give her a chance to further flesh out her policies and goals. Republican Donald Trump and Democratic challenger Kamala Harris are also scheduled to hold a presidential debate next month, the first opportunity for the nation’s 240 million voters to hear Trump and Harris explain their policies side by side before the November 5 election.
Crude Oil Prices Steady on Continued Supply Disruption
Crude oil prices steadied on Thursday after two sessions of losses as traders digested the possibility of continued supply disruptions. By 04:05 ET, U.S. West Texas Intermediate (WTI) crude futures were trading at $74.52 a barrel, while Brent crude futures were down 0.1% at $77.52 a barrel.
Oil markets have suffered two straight days of losses, reversing a recent recovery amid ongoing concerns that slowing growth in the United States and China could weigh on demand in the coming months. Outages in OPEC member Libya have added to concerns about supply stability. The ongoing conflict in the Middle East has also added to concerns about the impact on markets.
Oil prices fell for a second day in a row, continuing a slide seen so far this month, with the market focused on Libyan supplies, key technical indicators and U.S. inventory data. Those supply concerns overshadowed news that U.S. crude inventories fell by 0.85 million barrels in the week ended Aug. 23, according to the Energy Information Administration. The drop also raised concerns that U.S. oil demand could slow as the summer travel season draws to a close.
Futures have been battered in recent sessions, with the latest decline coming after they had risen to near their 200-day moving average but failed to clear that hurdle. Recent gains have been supported by political risks in the Middle East and the threat to supplies from Libya. The North African country’s output has nearly halved this week, risking pulling nearly 1 million barrels a day off the global market.
