NEW YORK, Aug 24 — Wall Street’s main indexes rose today, following a stellar forecast from chip designer Nvidia though caution ahead of Federal Reserve Chair Jerome Powell’s speech later this week kept gains in check.
The chip designer late on yesterday forecast quarterly revenue that far exceeded expectations, boosting investor confidence in an artificial intelligence (AI) boom, and said it would buy back US$25 billion (RM116 billion) in stock.
Shares of Nvidia were last up only 3 per cent, slipping from a fresh record high of US$502.66 earlier in the session, with some analysts pointing to profit-taking after a strong run of gains heading into the second-quarter results.
“When you look at an equity that’s up 220 per cent on a year to date basis, there’s always room for profit taking,” said Art Hogan, chief market strategist at B Riley Wealth.
Nvidia’s results also lifted Microsoft and Alphabet, which were up 0.7 per cent and 0.2 per cent, respectively. Both companies have been rushing to incorporate generative AI into their web search platforms.
However, shares of other technology-linked stocks such as Apple Inc, Tesla and Meta Platforms reversed course from premarket moves, falling between 0.6 per cent and 1.7 per cent.
Investors were hoping that Nvidia results would revive a rally in broader stock markets which had stalled recently due to concerns about interest rates staying higher for longer.
A Labor Department report showed initial claims for state unemployment benefits stood at 230,000 for the week ended August 19, against expectations of 240,000 as polled by Reuters, suggesting a still-tight labor market.
Separate data showed new orders for key US-manufactured capital goods rose modestly in July, suggesting business spending on equipment could continue to grow.
The reports came ahead of a speech by Fed Chair Jerome Powell at an annual central bank summit in Jackson Hole on Friday that would offer more clues on the direction for the US interest rates.
“The Jackson Hole last year was not good for markets. So you’ve got a little bit of a down shift into a wait-and-see mode to ascertain what Powell is going to sound like this year at Jackson Hole,” said Hogan.
Traders’ bet of the central bank holding its interest rate at current levels in the September policy meet was intact at 84.5 per cent.
At 9.38am ET, the Dow Jones Industrial Average was up 13.27 points, or 0.04 per cent, at 34,486.25, the S&P 500 was up 10.32 points, or 0.23 per cent, at 4,446.33, and the Nasdaq Composite was up 45.52 points, or 0.33 per cent, at 13,765.47.
Pressuring the cyclicals-heavy Dow, Boeing fell 3.9 per cent after the planemaker said it had recently identified a new 737 MAX quality problem involving supplier Spirit AeroSystems that will delay near-term deliveries.
Dollar Tree lost 9.6 per cent after the retailer forecast annual profit largely below estimates.
Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE and for a 1.29-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and 7 new lows, while the Nasdaq recorded 25 new highs and 82 new lows. — Reuters