4:15pm: Stocks sluggish
The three major stock indexes finished Wednesday’s trading session little changed after a sharp pullback in tech stocks, notably Nvidia which has shed more than 10% far this week.
The Nasdaq was down 0.3% at 17,084 points, the S&P 500 was down 0.2% at 5,520 points, while the Dow Jones eked out a 0.1% gain at 40,974 points.
2:40pm: Nvidia's AI dominance in question
Nvidia's big decline in share value earlier this week is a reflection of the volatility in the artificial intelligence sector, says Antonio Ernesto Di Giacomo, Senior Market Analyst at XS.com.
Its decline was the largest single-day loss in market value for a US company this year, with a decrease of $279 billion in market capitalization, according to the XS.com analyst.
The AI giant's drop is "particularly notable given its crucial role in the artificial intelligence (AI) sector, a technology that has driven much of the market's growth in 2024," Di Giacomo commented.
"Throughout the year, Nvidia has positioned itself as a leader in creating the chips and hardware necessary for developing AI applications, which had heightened expectations for its financial performance. However, the company's recent quarterly forecast failed to meet expectations, leading to a strong market reaction," he wrote.
"Investor skepticism has grown, not only due to Nvidia's performance but also because of doubts about the long-term viability of massive investments in AI. While the technology has shown significant potential, the current revenues generated by AI have yet to fully justify the high valuations of companies involved in this sector.
"The concern is that if AI does not meet expectations in terms of revenue generation, the valuations of companies like Nvidia could be overestimated, potentially leading to further corrections in the future."
Shares of Nvidia were down another 1.5% on Wednesday afternoon.
Across the wider market, the indices turned broadly negative, with the S&P 500 and the Nasdaq both down 0.3% and the Dow hovering near the flatline.
12:25pm: Stocks stabilize after Nvidia slide
Markets partially rebounded from earlier declines driven by concerns over economic growth and a downturn in Nvidia shares.
At around midday, the S&P 500 increased by 0.3%, the Nasdaq gained around 0.4%, and the Dow Jones rose approximately 0.5%.
Stocks have recouped some of yesterday’s losses, even after more data showing a cooling US economy, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
“If today’s JOLTS are any guide, then Friday’s payroll data is unlikely to provide much comfort for investors," Beauchamp commented.
"The Bank of Canada has joined the rate cutting party, but what is remarkable is that pricing of a 50bps cut from the Fed has continued to eke higher. If this persists into the meeting itself, it will mean that markets are setting themselves up for disappointment. Today’s data shows that the market is cooling, not that a recession is round the corner.”
11:05am: August job data looms
As stocks stabilize, all eyes are turning to Friday's jobs report to get mroe insight into the reality of US economic growth.
Bank of America analysts are forecasting "solid" job growth for August.
"We expect nonfarm payrolls to rise by 200,000 in August after coming in at 114,000 in July. Public sector hiring should rise 30,000 on the back of local employment. Hence, we see private payrolls rising by 170,000. Education & healthcare hiring should remain robust.
"We look for the unemployment rate and labor force participation rate to decline a tenth each, to 4.2% and 62.6%, respectively. We think average hourly earnings and average weekly hours will both rise by a tenth to 0.3% m/m and 34.3, respectively."
10.05am: Short-term JOLT
US stocks slipped lower after the JOLTS job openings survey came in below expectations.
Job openings for July were 7.673 million, below the consensus estimate of 8.1 million, and down from the previous month, which was revised down to 7.91 million.
The Wall Street indexes lurched lower, before returning to roughly where they were before.
9.54am: Mixed open
After an initial slide, it's a mixed start for Wall Street, with the Nasdaq down 0.3%, the S&P 500 flat and the Dow Jones up 0.1%
Big tech are mostly behind the selling pressure, with Nvidia down more than 3% and ASML 4%, while Apple, Amazon, Broadcom all sit at least 1% lower.
But Google owner Alphabet, Tesla, Netflix and Adobe are all higher. Topping the Dow are Travelers Companies, 3M, UnitedHealth and Visa.
7.55am: Nasdaq to continue selling off
The sell-off in US stocks is expected to continue on Wednesday, with Nvidia and other tech giants of the Nasdaq market heading the retreat.
Nasdaq 100 futures were down 0.7%, with those for the S&P 500 down 0.4% and Dow Jones futures down 0.2%.
This followed a 3.3% decline for the wider Nasdaq Composite index the day before, as NVIDIA Corp (NASDAQ:NVDA) saw a record $270 billion knocked off the microchip maker’s market value as its shares fell almost 10%.
The S&P 500 fell 2.1% and the Dow 1.5%.
Today, Nvidia is down another 1.8% premarket, with analysts pointing to an antitrust probe from the Department of Justice into the company's business dealings.
Since last week, Nvidia boss Jensen Huang’s net worth is estimated to have shrunk by about $10 billion to a mere $94.9 billion, according to Bloomberg.
Elsewhere in the tech sector, ASML is down over 5% in Amsterdam and will also weigh. Apple and Google parent Alphabet and Meta Platforms are all down over 0.9% premarket, with Microsoft 0.8% lower and Broadcom down around 2%.
In its earnings report, retailer Dollar Tree (NASDAQ:DLTR) warned of "macro pressures on the purchasing behaviour" of customers as it cut guidance for the year.
Later, the Job Openings and Labor Turnover Survey (JOLTS) report will be in focus for what it might tell us about the non-farm payrolls coming on Friday.
Analysts at Rabobank said chances that the pronounced moves seen yesterday are halted or reversed may well be determined by the US payrolls report this coming Friday, so the JOLTS report is "of some discernible importance in this regard".