4:19pm: Nvidia surge vanishes
The Dow closed Thursday down 374 points, 1.1%, at 34,099, the Nasdaq Composite declined 257 points, 1.9%, and the S&P 500 fell 60 points, 1.4%, to 4,376. The small-cap Russell 2000 index dropped 24 points, 1.3%, to 1,846.
It was the worst day for the DJIA since March. Even Nvidia, which started the day up more than 7% on a strong earnings beat, was only 0.1% ahead by the closing bell.
“I think it’s a very narrowly focused market,” said Phillip Colmar, global strategist at MRB Partners, adding that just a few names are driving the entire market. “I do think if you’ve got a better growth backdrop and higher bond yields, it lends itself naturally to a broadening of the market. We saw some of that in recent weeks.”
12:00am: Stocks head lower as Nvidia-inspired rally peters out
The Nvidia inspired rally has faded and all three major indices are nursing hefty losses as attention switches to the Jackson Hole gathering of central bankers where Federal Reserve chair Jerome Powell will speak tomorrow.
At midday, the Dow Jones Industrial Average was down 0.5% at 34,291.63, the S&P 500 was down 0.8% at 4,400.37 and the Nasdaq Composite was up 0.3% at 13,763.09.
Axel Rudolph at IG said: "Thursday's rally in European and US stock indices on the back off much-better-than expected Nvidia Q2 results ran out of puff as investors took money off the table ahead of Jerome Powell's Jackson Hole speech on Friday. In it the Fed Chair is expected to disappoint investors looking for reassurance that US rates have peaked."
Nvidia held in positive territory but was well below its early levels, now up 1.4%, after its blow-out earnings.
9:40am: Nasdaq makes steady progress but Dow lags
US stocks have made a mixed start to Thursday's session with Nvidia lifting the S&P 500 and the Nasdaq while the Dow lagged behind.
Shortly after the opening bell the Dow Jones Industrial Average was down 0.1% at 34,452.61, the S&P 500 was up 0.2% at 4,446.28 and the Nasdaq Composite was up 0.3% at 13,763.09.
Nvidia remains the star of the show, opening 4.7% higher after its blow-out quarterly earnings.
“Nvidia is seen as the poster child for artificial intelligence, with its chips playing a key role in the roll-out of AI systems. AI has been the hot investment theme in 2023 and Nvidia’s results imply there is a lot more to go for," said Russ Mould at AJ Bell.
In economic news, new orders for long-lasting goods in the US declined by the most in more than three years, as demand for aircraft weakened.
Durable goods orders, which include washing machines, cars and aircraft, fell 5.2% in July from the previous month, according to the Census Bureau, the biggest decline since April 2020 and below economists’ expectations of 4%.
Excluding transportation, which had boosted the headline figure for four consecutive months, new orders for durable goods increased 0.5% in July, up from a 0.2% monthly increase in June.
New orders for non-defence capital goods excluding aircraft, considered a proxy for business investment, rose 0.1% in July, rising above a 0.4% decline in June.
Elsewhere, new claims for US unemployment support were lower than expected last week, figures on Thursday showed.
According to the Department of Labor, initial jobless claims totalled 230,000 in the week ended August 19, falling by 10,000 from an upwardly revised 240,000 the week prior.
The latest reading came below FXStreet-cited consensus, which expected the figure to hold steady at 240,000.
Other stocks on the move on Thursday include Boeing, down 3.6%, after it announced yet another issue with its narrow-body 737 MAX jets, following repeated delays hitting deliveries in recent years.
Dollar Tree has opened 9.1% lower after its results while Petco Health and Wellness saw its stock slide more than 19% as American consumers spend less money on their pets.
7:00am: Nasdaq set to jump after Nvidia's "stunning quarter"
The Nasdaq is set for further gains on Thursday riding the wave of enthusiasm generated by blow-out results from Nvidia once more, although the mood among blue-chips is more subdued.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% lower, while those for the S&P 500 rose 0.6%, and contracts for the Nasdaq 100 futures were up 1.2%.
Nvidia Corp stock is up around 7.5% in pre-market trading after the chipmaker smashed Wall Street’s high expectations, with key revenue lines coming in billions of dollars better that forecast.
Deutsche Bank described the results as a “another stunning quarter,” while the outlook was “even more impressive.”
Morgan Stanley (NYSE:MS) said: “These are remarkable results, particularly in the context that the company is looking at so much unmet demand; the breadth of AI spending is clearly growing and appears to be durable.”
“To grow a business of this complexity this rapidly with such a recent inflection is remarkable supply chain performance,” it added.
Away from Nvidia and attention will switch to the Jackson Hole gathering of central bankers which will be addressed by Federal Reserve chair Jerome Powell tomorrow.
Jeffrey O'Connor at Liquidnet reckons “Jackson Hole will set the tone for the rest of the year. Many expect higher rates for longer - whatever signals Powell gives, they will act as traders’ starting gun and will likely usher a lively period of trading throughout September.”
Elsewhere, economic data sees the release of weekly jobless claims and durable goods order figures.
Initial jobless claims, a proxy for lay-offs, are expected to have ticked up to 240,000 last week from 239,000 the prior week while durable goods are projected to have fallen 4% last month after rising 4% in June.
In company news, look out for results from discount retailer Dollar Tree and retailer Gap.