US Stock Market Update: Nvidia’s Revenue Forecast Leads to Initial Rally but Indexes Turn Lower
The US stock market opened with a bang today as Nvidia’s robust revenue forecast calmed fears of a potential bubble in the artificial intelligence industry. The S&P 500 Index ($SPX) (SPY) started the day off strong, but has since dipped by -0.19%. Similarly, the Dow Jones Industrials Index ($DOWI) (DIA) is down by -0.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is lower by -0.49% as of midday.
December E-mini S&P futures (ESZ25) are down -0.43%, and December E-mini Nasdaq futures (NQZ25) have also taken a hit, dropping by -0.69%. This shift comes after Nvidia erased its intraday gains to trade lower, dragging benchmark indices along with it.
One standout performer today is Walmart, which is up by more than +5% following strong Q3 results that point to continued robust consumer spending. However, bond yields have whipsawed lower after the release of September nonfarm payrolls data, which showed a stronger-than-expected increase. The unexpected rise in the September unemployment rate to a four-year high has bolstered expectations that the Federal Reserve may still cut interest rates at next month’s FOMC meeting.
The Cboe Volatility Index ($VIX) is spiking, up 19% intraday to reach its highest point since October 17. Additionally, US weekly initial unemployment claims fell by -8,000 to 220,000, indicating a stronger labor market than anticipated. However, weekly continuing claims rose to 1.974 million, the highest level in four years, suggesting challenges for those seeking new employment.
On the economic front, US Sep nonfarm payrolls exceeded expectations, rising by +119,000, while the Sep unemployment rate unexpectedly climbed to a nearly four-year high of 4.4%. Average hourly earnings remained unchanged from August at +3.8% y/y, outperforming expectations.
Looking ahead, this week’s US economic schedule is packed with delayed economic reports set to be released. Friday will bring real earnings, the S&P US manufacturing and services PMI reports, the University of Michigan’s US consumer sentiment index, and the Kansas City Fed’s services activity report.
Overseas stock markets are displaying mixed performance today, with the Euro Stoxx 50 up +1.42%, China’s Shanghai Composite down -0.40%, and Japan’s Nikkei Stock 225 posting a sharp increase of +2.65%.
Interest rates are also in focus, with December 10-year T-notes (ZNZ5) edging higher by +4 ticks. The 10-year T-note yield is down -1.9 bp to 4.117%, recovering from a two-week low. T-note prices received a boost from easing inflation expectations, as the 10-year breakeven inflation rate dropped to a four-week low at 2.267%.
In the corporate earnings sphere, Q3 earnings season is winding down with 460 of the 500 S&P companies having reported results. According to Bloomberg Intelligence, 82% of reporting S&P 500 companies exceeded forecasts, marking the best quarter since 2021. Q3 earnings rose +14.6%, surpassing expectations of +7.2% y/y.
In stock movers news, Nvidia (NVDA) is down more than 2% after erasing earlier gains despite reporting strong Q3 revenue and forecasting solid Q4 revenue. Other notable stocks include Walmart (WMT) leading gainers in the Dow Jones Industrials, Regeneron Pharmaceuticals (REGN) posting gains, and Nasdaq Inc. (NDAQ) receiving an upgrade from Morgan Stanley.
On the flip side, Bath & Body Works Inc. (BBWI) is down more than -25% after reporting disappointing Q3 results. Jacobs Solutions (J) and Datadog (DDOG) are also in the red after falling short on revenue expectations.
Overall, the US stock market is experiencing a mix of positive and negative movements today, with investors closely monitoring economic data releases and corporate earnings reports for further insights into market direction.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute investment advice. This article was originally published on Barchart.com.
