4:20pm: Nvidia on deck
Wall Street finished Wednesday with little movement as investors largely stayed on the sidelines ahead of a major round of technology earnings, led by Nvidia after the closing bell.
The Dow Jones Industrial Average fell 114 points, or 0.2%, to 53,464. The S&P 500 slipped 2 points to 7,676, while the Nasdaq Composite lost 21 points, or 0.1%, to close at 26,130.
It was a quiet session for the major indexes, with investors reluctant to make big moves ahead of Nvidia’s quarterly results. The chipmaker remains a key bellwether for the artificial intelligence trade, and its earnings and outlook could set the tone for technology stocks and the broader market in the days ahead.
Nvidia is joined by Salesforce, CrowdStrike, Okta and HP among the notable companies reporting after the bell.
The earnings calendar stays busy Thursday morning, with Dollar Tree, Dollar General, Burlington Stores and Best Buy among the companies scheduled to report.
3:50pm: Small cap wrap
- HaemaLogiX reported that the first patient in its Phase 1 KOALA trial experienced no serious adverse events after receiving KMCAR T-cell therapy for relapsed or refractory multiple myeloma.
- Vivace Therapeutics appointed Craig Gibbs as President and CEO as it prepares to advance its lead cancer candidate VT3989 into a pivotal Phase 3 trial.
- Abercrombie & Fitch (NYSE:ANF) shares jumped about 13% after the apparel retailer reported second-quarter earnings well above expectations and raised its full-year outlook.
- Silver Bullet Mines shifted its near-term processing focus to Arizona’s Columbia and Gold Queen Complex to meet a major supply agreement for up to 36,000 tons of material annually.
- Millennial Potash Corp (TSX-V:MLP, OTCQB:MLPNF, FRA:XOD) completed a drillhole at its Banio Potash Project in Gabon that intersected approximately 80 metres of potash mineralization and expanded the known footprint beyond the current resource area.
- Bronco Resources reported rock sampling results of up to 55 grams per tonne gold and 149 grams per tonne silver from the Kodiak Zone Extension at its Placer Mountain Gold Project.
2:45pm: Market movers
- SAP faces concerns over its slower-than-expected AI monetization, prompting UBS to downgrade the software giant as its rollout of AI agents lags ambitious targets.
- Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) has agreed to pay up to $16.68 billion to settle claims from 29 US states alleging that Instagram and Facebook harmed children, misled users about safety and improperly collected data from users under 13.
- J M Smucker Co (NYSE:SJM) raised its full-year profit and sales outlook after first-quarter earnings and revenue comfortably exceeded Wall Street expectations.
- Abercrombie & Fitch (NYSE:ANF) surged after reporting second-quarter earnings well above expectations and raising its full-year outlook.
- Williams-Sonoma topped second-quarter expectations as comparable brand revenue rose 6.2%, prompting the home furnishings retailer to raise its full-year outlook.
1:45pm: Nvidia due up
Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) (Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), Nvidia Corp (NASDAQ:NVDA, XETRA:NVD)) is expected to top its own guidance again on Wednesday even as supply constraints, not demand, increasingly define the story.
The first order of business is the number itself, and most signs point to another beat. Nvidia guided for second-quarter revenue of $91 billion, plus or minus 2%, with gross margins of about 75%, implying earnings per share of roughly $2.03. Consensus sits at $92 billion and $2.09.
Over the last three quarters, Nvidia has handily exceeded its own guidance. Most analysts expect a similar beat this time, with management likely to meet or top the consensus October guide of $103.9 billion.
Shares of Nvidia are down 1.1% on Wednesday but have gained over 12% year to date.
12:30pm: Meta settles teen harm case
Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) has agreed to pay up to $16.68 billion to settle claims from 29 US states that Instagram and Facebook harmed children, misled users about safety and improperly collected data from users under 13, according to court filings.
The settlement ends a federal trial in California and includes $2.2 billion payable to California alone, the filing showed. It avoids penalties the states had sought that could have reached roughly $200 billion, while Meta had estimated its worst-case exposure at up to $1.4 trillion.
As part of the deal, Meta committed to spending $18 billion over 10 years on youth online safety initiatives. For users under 18, the company agreed to a default two-hour daily limit on Instagram and Facebook use and a nighttime block from midnight to 6 am., with parental approval required to lift either restriction.
Other measures include an option for a non-personalized feed, the ability to hide like and reaction counts, stronger age verification and removal of users under 13, additional parental controls, and a commitment to respond to 90% of reports of potentially harmful content within six hours.
11:10am: Inflation still stubbornly high
Inflation remains stubbornly high, but economists say the data is unlikely to push the Federal Reserve toward another interest rate hike this year.
Jeffrey Roach, chief economist for LPL Financial, said consumers are still benefiting from income growth that continues to outpace inflation, although services prices remain elevated. “For policymakers, the balance of risks still tilts toward inflation,” he said. :If geopolitical tensions ease in the near term, core inflation could fall below 3%, giving investors a reason for optimism.”
Jamie Cox, managing partner at Harris Financial Group, described inflation as “annoyingly sticky” but said it is not severe enough to prompt further Fed tightening. “Given that the methodology used to calculate PCE will change next month, it’s highly likely PCE trends lower soon,” he added.
10:00am: Sticky inflation
Wall Street opened with a cautious tone on Wednesday, with the major indexes hovering near the flatline as investors digested a slightly hotter-than-expected inflation report and looked ahead to Nvidia’s closely watched earnings after the closing bell.
The Dow Jones was down 58 points, or 0.1%, at 53,519, while the Nasdaq slipped 41 points, or 0.2%, to 26,110. The S&P 500 was essentially unchanged at 7,679.
The latest PCE inflation data gave investors little reason to relax about price pressures. Headline PCE rose 0.2% month over month, above expectations for a 0.1% increase, while the annual rate came in at 3.7%, slightly above the 3.6% forecast. Core PCE matched estimates, rising 0.2% on the month and 3.3% from a year earlier.
Consumer spending rose 0.2%, beating expectations for a 0.1% increase, while personal income climbed 0.4%, also ahead of forecasts. Real personal consumption was flat.
With inflation still running above the Fed’s comfort zone, investors are keeping a close eye on what the data could mean for the path of interest rates.
The other major focus is Nvidia, which reports after the bell. Expectations are high for the AI chip giant, although options markets are signaling investors may be expecting a relatively muted post-earnings reaction. Nvidia’s results will be closely watched for fresh clues on the durability of AI spending and the broader tech rally.
It is also a busy evening for earnings, with Salesforce, Synopsys, CrowdStrike and HP all due to report. Meanwhile, Intuit is under pressure after its outlook failed to impress investors.
Elsewhere, oil prices are moving lower after Oman and Iran discussed a possible joint temporary navigational corridor through the Strait of Hormuz, easing some concerns about supply disruptions and broader tensions in the region.
For now, Wall Street appears to be in wait-and-see mode, with sticky inflation keeping investors cautious and Nvidia’s earnings looming as the next big potential market catalyst.
Ahead of the bell
US stock futures went nowhere on Wednesday morning, which tells you plenty about how much is riding on the next 12 hours.
Contracts on the Dow Jones Industrial Average and the S&P 500 sat close to flat, while the tech-heavy Nasdaq 100 slipped 0.2% after Tuesday's broad gains.
First comes the inflation test at 8.30 am ET. Economists expect core personal consumption expenditures (PCE), the Federal Reserve's preferred measure of price growth, to hold at 3.3%.
Anything hotter would land awkwardly, with the bond market already jumpy and Fed chairman Kevin Warsh due to speak at this week's Jackson Hole gathering of policymakers.
Then comes Nvidia after the closing bell, now the quarterly health check for the entire artificial intelligence trade.
Expectations are high, and investors increasingly want evidence that the vast sums being spent on AI infrastructure are earning a return.
One thing to watch beyond the graphics chips: Nvidia's networking arm generated nearly $15 billion last quarter, against roughly $3 billion a quarter two years ago, and analysts expect close to $17 billion this time.
Networking grew nearly 200% year on year last quarter, against 77% for compute.
CrowdStrike, Williams-Sonoma, Okta and Abercrombie & Fitch (NYSE:ANF) also report on Wednesday.
Flat futures, then, but hardly a quiet day. One flag from the source copy: it says a stalled or reaccelerating PCE would pressure the Fed "to raise rates". I've left that framing out, as it reads as an overstatement of where the debate sits. Say if you want it back in.
