Stock Futures Hold Steady Amid Nvidia’s Latest Earnings
On Thursday morning, stock futures stayed mostly flat, even as investors analyzed Nvidia’s recent quarterly results.
The S&P 500 Futures were just above the flatline, while Nasdaq-100 Futures dipped slightly. Conversely, Dow Jones Industrial Average-linked futures rose by 86 points, translating to a 0.2% increase.
Interestingly, Nvidia represents about 8% of the S&P 500, yet its stock fell nearly 2% despite beating Wall Street estimates for the second quarter. There was also some pressure from rival chipmakers, AMD and Taiwan Semiconductor, which were feeling the pinch too.
Despite reaching record highs, investor sentiment appeared mixed as the S&P 500 closed positively. Nvidia’s performance exceeded expectations, yet investors seem to have anticipated even more.
“The negative stock reaction feels like a bit of an overreaction,” said David Wagner, a stock director at APTUS Capital Advisors. He suggested that investors might want to “buy into the pullbacks.”
“The company’s boosted guidance—over 50% at a quarterly return rate of $500 billion—is quite surprising, even considering its current valuation,” he added.
Nvidia did mention it wouldn’t sell its H20 chips to China this quarter, and it doesn’t foresee any guidance cargo. Earlier in the month, the White House was still figuring out the legality surrounding a 15% export tax on Nvidia and AMD.
“That’s crucial because it brings uncertainty. Will they actually get the H20 license and begin sales?” remarked Art Hogan, chief market strategist at B. Riley Wealth Management. “If they do secure the license, there’s potential for upside.”
Hogan expressed belief that the AI boom is still in its early stages. He praised CEO Jensen Huang for effectively outlining future possibilities, with investors seeing Nvidia as a leading player in the AI landscape.
The market seemed to be on an upward trend as it opened on Wednesday, with both the S&P 500 and Nasdaq climbing over 2%. Meanwhile, the Dow saw an increase of more than 3% during the same timeframe.
Recent political shifts have raised concerns for investors, specifically regarding the independence of the Federal Reserve post-Trump’s legal challenges. Top economic advisor Kevin Hassett suggested that certain Fed officials should refrain from their roles if they plan to pursue legal action against the administration.
