S&P 500 and Nasdaq Composite Recovery Rally Stalled Ahead of Nvidia Earnings

Barry Adams
27 Aug, 2024
New York City

Stocks struggled to advance on Wall Street ahead of widely anticipated earnings from Nvidia, a bellwether for artificial intelligence-related tech stocks. 

Market sentiment was cautiously optimistic as investors are hoping that Nvidia will deliver another quarter of a sharp increase in revenue and earnings amid rising acceptance of its hardware and software platforms for AI-related applications. 

Nvidia is a key beneficiary of a sharp jump in capital spending by Amazon, Microsoft, Alphabet, and other leading tech companies developing artificial intelligence-linked applications. 

Analysts are estimating the company to deliver between 64 cents and 71 cents per share in the latest quarter ending in July, sharply higher than 25 cents in the corresponding quarter a year earlier. 

Revenue in the quarter is expected to soar to $28.68 billion from $13.51 billion a year earlier. 

Nvidia sales have been on a tear, and the company has benefited from its leadership positioning in the market and accelerated its quarterly sales growth between 80% and 100% for eight quarters in a row. 

Nvidia's quarterly earnings per share have also exceeded between 5 cents and 6 cents from the consensus earnings estimates of analysts. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.3% to 5,599.61, the Nasdaq Composite fell 0.8% to 17,575.39, and the Russell 2000 index declined 0.6% to 2,205.89.  

The yield on 2-year Treasury notes edged higher to 3.96%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched higher to 4.16%.

WTI crude oil decreased $0.83 to $76.59 a barrel, and natural gas prices edged down 2 cents to $1.93 a thermal unit.

Gold fell by $4.69 to $2,510.75 an ounce, and silver increased by $0.07 to $29.94.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 100.81.

 

U.S. Stock Movers

Nvidia Corp. edged down 1.1% to $125.05, and investors are estimating that the company will deliver another quarter of strong revenue and earnings growth and surpass earnings per share expectations of 64 cents. 

Cava Group declined 8.2% to $115.60 after several corporate insiders and a key investor disclosed their plans in regulatory filings to trim their holdings. 

Apple Inc. decreased 0.8% after the company said chief financial officer Luca Maestri will step down on January 1, 2025, and be replaced by the current vice president for financial planning and analysis, Kaven Parekh.

Maestri will continue to lead a group responsible for real estate development, information technology systems, and security.