S&P Futures experienced an uptick on Thursday as market participants assessed Nvidia’s recent quarterly performance exceeding expectations. The report seemed to aid in reinstating confidence in significant technology stocks, thereby offering a lift to the overall market. Futures associated with the Dow Jones Industrial Average increased by 235 points, representing a 0.5% rise. Futures for the S&P 500 increased by 1.2%, whereas futures for the Nasdaq 100 surged by 1.6%.
Nvidia shares experienced a nearly 5% increase in premarket trading following the release of its much-anticipated quarterly results, surpassing Wall Street’s earnings and revenue forecasts. The market-moving company provided a fourth-quarter sales forecast that exceeded expectations, with CEO Jensen Huang noting that demand for its current-generation Blackwell chips is “off the charts.” He also dismissed the notion of an AI bubble. Nvidia’s optimistic guidance probably bolstered investor sentiment regarding the AI sector, which has faltered in recent sessions due to concerns over high valuations, debt financing, and the possibility of chip depreciation.
The results propelled a range of stocks within the AI ecosystem during the after-hours session, notably among chipmakers Advanced Micro Devices and Broadcom, as well as power infrastructure firms like Eaton. “Nvidia’s numbers remain extremely strong now, but there are inevitably questions whether Huang’s company has already reached its high-water mark in terms of growth and market share,” stated David Russell. In the prior session, all three principal U.S. stock indexes experienced gains as investors anticipated Nvidia’s report. Gains in the S&P 500 and Dow Jones Industrial Average halted a four-day decline for both indexes. Indeed, equities are experiencing a decline this week, reflecting the severity of the recent retracement in numerous growth stocks.
The minutes from the Federal Reserve’s October meeting, released Wednesday afternoon, revealed a divergence of opinions among Fed officials regarding whether the deceleration of the labor market or inflation posed a greater risk to the U.S. economy. The divergence among central bank officials is evident in their perspectives regarding the forthcoming December decision, with “many” officials advocating against any further interest rate reductions this year. Market participants are assigning a 33% probability to the Federal Reserve reducing its key overnight borrowing rate by 25 basis points at the forthcoming December meeting, a notable decline from their expectations just a month prior, according to the reports. On Thursday morning, the Bureau of Labor Statistics is set to publish the September nonfarm payrolls data, a release postponed due to the U.S. government shutdown.