4:10pm: Nvidia's soaring shares fail to offset rate concerns
The Dow Jones finished its worst day of the year, dropping 1.5% on Thursday as US markets ended the day on the back foot.
The Nasdaq Composite and the S&P 500 also slipped by about 0.4% and 0.8%, respectively.
Nvidia's stellar earnings had initially fueled optimism in the AI sector, sending its shares soaring over 9% and crossing the $1,000 mark for the first time. However, concerns over interest rates resurfaced following Federal Reserve minutes suggesting a willingness to maintain higher rates if inflation persists.
The AI company ended the day with a gain of 9.3% just shy of $1,034 a share.
Meanwhile, economic data, including a stronger-than-expected PMI reading for May, added to worries about inflationary pressures, leading to declines in both chip stocks and copper futures.
Despite opening at an all-time high, semiconductor stocks saw a downward trend throughout the day, reflecting broader market sentiment.
12:13pm: Nvidia above $1,000
After a stellar earnings report, chipmaker Nvidia traded more than 10% higher at noon just shy of $1,050, boosting tech stocks like server makers Dell and Super Micro Computer, which added 6.7% and 2% respectively.
The tech-laden Nasdaq held onto its gains, up 0.8% at 16,939 points.
The S&P 500 was up 0.2% at 5,319 while the Dow Jones traded down 0.6% at 39,414 points.
Airplane manufacturer Boeing dropped more than 5% on the news there will be a delay in plane deliveries to China as the country’s regulator seeks additional documentation related to batteries located in cockpit voice recorders.
Tesla shares also slipped almost 2% after the automaker omitted its previously stated goal of delivering 20 million vehicles per year by 2030 in its latest impact report.
11.14pm: Markets mixed
The Nasdaq continued in positive territory on Thursday, up 103 points, buoyed by NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) after the chipmaker’s first-quarter earnings beat.
Fortunes were mixed on Wall Street though, with the S&P 500 up 6 points but the Dow Jones down 263 points.
“For many, [NVIDIA’s earnings] essentially draws a line under the first quarter earnings season, with 95% of the S&P 500 having now reported,” Scope Markets analysts said.
“Despite a strong earnings season having helped push the likes of the Dow up to record highs of 40k, this summer could be a difficult one if we are solely focused on the inflation and interest outlook.”
10.05am: Uneven boost
Nvidia has provided an uneven boost to Wall Street, with Nasdaq climbing at the open, the Dow Jones falling and the S&P 500 flat after just over half an hour's trading.
8.50am: Murdochs and OpenAI strike deal
News Corp (NASDAQ:NWSA) (News Corp (NASDAQ:NWSA)), the owner of the WSJ and NY Post, is set to open 6% higher after it struck a deal with OpenAI to provide it with content from its publications.
Thursday’s deal is believed to be worth US$250 million over five years and will be paid to Rupert Murdoch's company through cash and credits for OpenAI technology.
8.34am: Ticketmaster owner to be broken up?
Ticketmaster’s owner is reportedly set to be hit with an antitrust lawsuit by the US Department of Justice, prompting speculation over a forced breakup.
According to the Washington Post, the case against Live Nation Entertainment Inc could be filed as early as Thursday, sending its shares down almost 8% in pre-market trading.
8.01am: Nasdaq to lead gains as Nvidia lifts tech sector
Nvidia is set to lead US stock indices higher on Thursday, after publishing impressive earnings overnight that have helped to lift tech stocks as well as the broader market.
The chipmaker was trading up 6.9% premarket, while Nasdaq 100 futures were up 1.16% and S&P 500 futures were pointing to a 0.74% gain. Dow Jones futures were up only 0.23%.
This followed a day where US stock indexes traded in a narrow range for most of the day ahead of the Nvidia update and minutes from the Fed’s last monetary policy meeting.
The FOMC minutes were released early in the evening, leading equities to slip into the red.
Participants noted "disappointing" data on inflation in the first quarter of the year, and expectedly, recent data did not increase their confidence that inflation was moving sustainably toward the Fed target.
UBS analysts noted that the language used to describe this was similar to that used in the March meeting minutes.
David Morrison at Trade Nation said: "Members were puzzled that the downward trend in inflation has stalled this year, while other economic indicators suggest that US growth is slowing. Many members have expressed their uncertainty over the future path of inflation, saying more time is required to provide evidence that inflation will resume its downward trend back towards the 2% target.
"In other words, many Fed members feel that the current trend in the data does not support a rate cut in the near-future, and a rate hike cannot be taken off the table, even as most FOMC members believe that current policy is restrictive enough."
As far as the markets are concerned, there are worries that the Fed is bamboozled when it comes to its outlook for inflation, Morrison translated.
"Despite this, the prevailing view is that mega-cap stocks can continue to do well even if rates stay at current levels."
news has helped to lift tech stocks, as well as the broader market. NVIDIA is a major constituent within the S&P 500 and NASDAQ 100, and both indices are sharply higher this morning and trading at fresh record highs. The next big test is whether equities can build on these gains once the US opens this afternoon.