4:05pm: All eyes on Nvidia
The Dow closed Wednesday 185 points, 0.5%, at 34,474, the Nasdaq Composite added 215 points, 1.6%, to 13,721 and the S&P 500 improved 49 points, 1.1%, to 4,463. The small-cap Russell 2000 index gained 21 points, 1.2%, to 1,872.
Tech stocks led a broad market rally ahead of one of the biggest earning reports after the close: Nvidia. The semiconductor company has been the S&P 500's best-performing stock of 2023 thus far, and investors will be eager to see if it can deliver on expectations.
Meanwhile, the index as a whole enjoyed its best individual day since June 30.
12:05pm: Tech stocks lead a broad-based market rally
US stocks were higher in noon trading ahead financial results from semiconductor giant Nvidia after the close, even as 10-year Treasury yields continue to hover near 16-year highs.
At midday, the Dow rose 141 points to 34,430 while the S&P 500 added 42 points at 4,430 and the tech-heavy Nasdaq gained 211 points to 13,717.
“I think almost nothing matters right now to market direction over the short term outside of these Nvidia earnings because, obviously, the whole narrative with weakening manufacturing and still a somewhat puzzlingly strong consumer doesn’t necessarily jive with market direction at the moment because multiples have expanded,” Gratus Capital chief investment officer Todd Jones said.
Notable movers included shares of Abercrombie & Fitch (NYSE:ANF) Co, which soared 25% after the lifestyle apparel retailer’s 2Q financial results topped analyst expectations.
9:40am: Stocks climb but Foot Locker and Peloton slump
US markets opened higher despite two well-known names, Foot Locker and Peloton, plunging after disappointing earnings.
Shortly after the opening bell, the Dow Jones Industrial Average was up 47.10 points, 0.1%, at 34,335.93, the S&P 500 was up 14.82 points, 0.3%, at 4,402.37 and the Nasdaq Composite was up 58.28, 0.4%, at 13,564.15.
Investors are pinning their hopes on strong results from chip maker Nvidia after the closing bell in an attempt to lift the market from the August blues.
Focus is also shifting to the Jackson Hole gathering of central bankers at which Federal Reserve chair Jerome Powell will speak.
Early results have seen Foot Locker shares slump 35% after the company reported a fall in sales, reduced guidance for 2023 and announced a pause to the dividend after seeing a “softening in trends in July.”
The footwear retailer reported a 9.9% drop in sales to $1.86 billion, below Street expectations of $1.88 billion, and now expects 2023 sales to fall by 8-9%, compared to a previously issued forecast of a 6.5-8% decline.
The warning dragged shares in Nike Inc (NYSE:NKE) down, which opened 3.6% lower.
Online fitness provider Peloton skidded off-track after revenue missed Street expectations, with costly equipment recalls mounting, and an increasing numbers of users pausing subscriptions.
Shares fell 19% as the firm reported a loss of $242 million for the quarter, that’s 68 cents per share, is significantly higher than the consensus, pitched at 40 cents per share.
7:00am: Nasdaq futures pointing higher ahead of Nvidia
US stocks are expected to open higher on Wednesday as investors two key events which may dictate the path of equities for the rest of the week.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.4% higher, while those for the S&P 500 rose 0.5%, and contracts for the Nasdaq 100 futures were up 0.6%.
First up are eagerly awaited results from Nvidia Corp after its blow-out numbers in the previous quarter.
Results will be released after the market close on Wednesday with attention centred on artificial intelligence-related revenue.
Neil Wilson at Markets.com said: “Clearly a lot is hanging on results from Nvidia after the bell tonight.”
“It’s expected to deliver a roughly 67% rise in Q2 revenues. Remember a lot is already in the price after it guided for fiscal Q2 to be $11bn, $4bn more than had been expected,” he pointed out.
Elsewhere, markets are gearing up for tomorrow's Jackson Hole Symposium, with Federal Reserve Chair Jerome Powell’s appearance on Friday the main event of note.
Last week, minutes from the last Federal Open Market Committee meeting showed officials saw significant upside risks to inflation and investors will be looking for more colour on this, and the likelihood of further interest rate rises.
Victoria Scholar at Interactive Investor said the market will be looking for “clues into whether interest rates will remain higher for longer and whether the ideal soft-landing scenario in which inflation comes down, yet a recession is avoided can realistically be achieved.”
In economic news, PMI figures will be studied for evidence of the much-hoped for soft landing, particularly in light of weak data in the UK and Europe today.
Banks will be in the spotlight after S&P’s downgrades yesterday while other companies reporting today include online fitness group Peloton and discount retailer Kohl’s.
Beauty and personal care group Bath & Body Works Inc is quick out of the blocks with its numbers but not with the desired result.
The stock has plunged more than 12% in Wednesday’s early deals, as quarterly results disappointed.
Aside from the PMI figures, new homes sales data will also hit the wires.