4:15pm: Tech stocks face pressure
The Dow closed at a record high for the third time this week, gaining over 200 points to reach 41,335, while the Nasdaq and S&P 500 finished lower as investors reacted to Nvidia's earnings report and stronger-than-expected U.S. economic growth data.
The Nasdaq closed at 17,516 points, off 0.2%, and the S&P 500 finished flat at 5,592.
Despite Nvidia exceeding revenue forecasts, its stock fell approximately 6% due to guidance that did not meet elevated investor expectations, raising concerns about the sustainability of the AI boom that has driven market gains this year.
3:15pm: Best Buy positioned for growth
Best Buy Co Inc (NYSE:BBY) shares flew higher on Thursday after the retailer reported better-than-expected earnings for its fiscal second quarter of 2025.
Shares of Best Buy skyrocketed 15.3% higher
The electronics retailer's revenue for the quarter ending August 3, 2024, came in at $9.29 billion, down 3.1% from the same period last year.
Best Buy is positioned for growth, analysts at Jefferies noted, with a 32% upside potential to a price target of $116.
1:15pm: Dow hits record
The Dow Jones hit a record high on Thursday, gaining over 350 points to hit 41,577 as investors reacted to Nvidia's earnings and stronger-than-expected US economic growth.
At midday, the index was up 1.1%, while the Nasdaq climbed nearly 0.9%, and the S&P 500 advanced around 0.7%.
While Nvidia's results topped estimates, concerns about the sustainability of the AI boom led to a 3% drop in its shares. In contrast, Salesforce shares surged on strong earnings, while Best Buy jumped 17% on better-than-expected results, and Dollar General plunged 25% after cutting its full-year outlook.
11:10am: Fed rate cuts could spark hiring surge
The GDP revisions show the US economy was in good shape in mid-2024, according to Comerica's chief economist Bill Adams.
"Solid growth of consumer spending propelled the economy forward in the second quarter, and the increase of consumer confidence in July suggests it will propel growth in the second half of the year as well."
Hiring will likely pick up in late 2024 and early 2025 as the Fed begins to cut interest rates, Adams added.
"Interest rate sensitive sectors like housing are a coiled spring and should bounce back as interest rates fall. That should stabilize the unemployment rate and keep the economy growing."
9.50am: Wall Street gains as GDP, jobs data paint better picture
Wall Street got a boost on Thursday morning after better GDP data and lower weekly jobless claims figures painted a stronger picture of the US economy.
The Nasdaq opened 0.7% higher following the bell, while the Dow Jones and S&P 500 ticked up 0.3% and 0.4% respectively.
Revised GDP data on Thursday morning showed the economy grew faster than first thought during the second quarter, by 3.0% against a previous estimate of 2.8%.
Figures also showed jobless claims had fallen by 2,000 to a seasonally adjusted 231,000 over the course of last week and sat lower than analysts' estimates.
“Overall, these data points will reaffirm that growth remains strong in the US even if the labour market is softening,” Validus Risk management analyst Ryan Brandham commented.
He added the figures would support expectations for a 25 basis point reduction to base interest when the Federal Reserve next meets in September, following anticipation for a steeper 50-point cut.
Nvidia Corp looked to recover from a sell-off after Wednesday’s post-market results in the meantime, opening 1.8% lower following a near 7% drop in after-hours trading initially.
9.24am: US economy grew faster than first thought in second quarter
US gross domestic product grew by 3.0% during the second quarter and faster than first thought, Bureau of Economic Analysis data showed on Thursday.
In its second estimate for the quarter, the Bureau of Economic Analysis raised the figure from 2.8% on an annual basis.
This was as consumer spending and import figures were revised upwards, boosting the figure despite being partially offset by lowered figures elsewhere.
These included “non-residential fixed investment, exports, private inventory investment, federal government spending, state and local government spending, and residential fixed investment,” the Bureau of Economic Analysis said.
7.48am: Wall Street set for positive start
Wall Street was expected to enjoy a positive start to the day on Thursday as Nvidia recovered slightly following a sharp drop in pre-market trading after results last night.
Futures had the Dow Jones climbing 0.6% on Thursday’s opening bell, while the Nasdaq and S&P 500 were seen 0.1% and 0.2% higher respectively.
Heavyweight Nvidia had dropped close to 7% after post-market earnings on Wednesday, as its latest beat failed to overshadow guidance below the top-end of market expectations.
This had threatened to drag the Nasdaq and S&P down, as wider technology stocks also took a beating, but a slight recovery since left Nvidia 3.5% off before the market’s open, while peers looked to regain.
Scope Markets analyst Joshua Mahony commented: “If past performance is anything to go by, Nvidia will likely manage to overcome those estimates.
“For investors, this dip will likely represent a potential opportunity, while the wider markets will also be able to breathe a sigh of relief that the second quarter earnings season is behind us.”
Attention on Thursday turns to Lululemon Athletica’s after-hours report, while the latest estimate for second-quarter gross domestic product is also due, alongside jobs data.