(Bloomberg) — Big tech pushed the stock market further away from all-time highs, and Wall Street waited for Nvidia’s earnings on Wednesday to see if the company can live up to the lofty expectations of the artificial intelligence boom. .
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The ongoing earnings season has so far reconfirmed what bulls have long expected, with earnings holding steady, but the results for the ‘Magnificent Seven’ mega-cap stocks remain strong. The period was different. Nvidia’s numbers sparked alarm as traders scrutinized the latest corporate earnings and awaited further clues about the U.S. Federal Reserve’s outlook.
The bar is set high for the giant chipmaker, which has more than tripled in value by 2023 and has been the best performer on the S&P 500 this year. The company’s revenue is expected to be boosted by a surge in demand for its data center business. Susquehanna said AI will continue to perform well, especially as Metaplatforms Inc. and Tesla Inc. continue to stress graphics processing units.
Matt Maley of Miller Tabak + Co. is betting on NVIDIA to report solid earnings and forecasts, but one thing to keep in mind is that stock prices don’t always respond well to great business results. That means no.
“Sometimes their expectations are so high that we get a ‘sell the news’ reaction, Maley says. I wouldn’t be surprised if traders remain silent until they report this Wednesday evening.”
Nvidia fell about 6% in the lead-up to the earnings release, led by MegaCap’s losses. The tech-heavy Nasdaq 100 fell nearly 1.5%, and the S&P 500 fell below 5,000. Walmart rebounded by announcing strong financial results. The yield on the 10-year U.S. Treasury note fell 3 basis points to 4.25%. The dollar has fallen.
“We expect a lot of disruption on board over the next few weeks as the S&P remains flat near $5,000,” Piper Sandler’s Craig Johnson said. He said “February’s performance so far has been exceptionally strong compared to previous seasonality, and he believes the second half of the month could be a time for bulls to take a break and cut some profits. thinking.”
Company highlights:
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Walmart also announced that it has agreed to acquire smart TV maker Vizio Holdings for approximately $2.3 billion.
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Macy’s announced that it has received nine nominations to its board of directors from Arkhouse Management, an activist investor leading acquisitions of department store companies.
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Home Depot Co. reported its fifth straight year of declines in comparable sales, highlighting a drop in demand for home improvement due to high mortgage rates and a slowdown in construction.
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The Biden administration is negotiating to give Intel more than $10 billion in subsidies, the biggest subsidy ever under a plan to bring chip manufacturing back to U.S. soil, people familiar with the matter said.
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The United States plans to give $1.5 billion to GlobalFoundries Inc., the nation’s largest make-to-order semiconductor maker, as part of the Biden administration’s efforts to boost domestic semiconductor production.
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Capital One Financial Corp. has agreed to acquire Discover Financial Services in a $35 billion all-stock deal, creating the largest U.S. credit card company by loan value and creating a combined company with Wall Street giants. You can build a stronger foothold to compete.
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Barclays is set to commit to major cost cuts, reorganize its reporting structure and return at least £10bn to shareholders over the next few years, following months of deliberations on the future direction of one of Europe’s largest investment banks. He said he would put an end to speculation.
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Bayer AG plans to cut its dividend by 95% as it seeks to dig itself out of the hole left by its acquisition of Monsanto, which is saddled with huge debts and a spate of lawsuits.
This week’s main events:
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Eurozone consumer confidence Wednesday
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Nvidia, HSBC profits Wednesday
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The US Federal Reserve releases minutes of its January meeting on Wednesday.
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Atlanta Fed President Rafael Bostic speaks Wednesday
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
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U.S. new unemployment insurance claims, U.S. existing home sales, Thursday
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ECB releases January Governing Council report on Thursday
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Fed President Lisa Cook and Minneapolis Fed President Neel Kashkari meet on Thursday
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Chinese real estate prices Friday
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Germany IFO Business Environment, GDP, Friday
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ECB releases one-year and three-year inflation expectations survey on Friday
The main movements in the market are:
stock
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As of 10:31 a.m. New York time, the S&P 500 was down 0.7%.
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Nasdaq 100 fell 1.4%
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The Dow Jones Industrial Average is little changed.
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Stoxx European 600 drops 0.2%
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MSCI World Index falls 0.4%
currency
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The Bloomberg Dollar Spot Index fell 0.2%.
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The euro rose 0.4% to $1.0824.
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Sterling rose 0.5% to $1.2663.
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The Japanese yen rose 0.3% to 149.73 yen to the dollar.
cryptocurrency
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Bitcoin fell 0.8% to $51,470.01.
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Ether fell 2% to $2,907.54.
bond
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The 10-year Treasury yield fell 3 basis points to 4.25%.
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Germany’s 10-year bond yield fell 4 basis points to 2.37%.
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UK 10-year bond yields fell 6 basis points to 4.04%.
merchandise
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West Texas Intermediate crude oil fell 0.4% to $78.90 a barrel.
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Spot gold rose 0.6% to $2,029.71 an ounce.
This article was produced in partnership with Bloomberg Automation.
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