Wall Street was looking jittery overnight ahead of the release of Nvidia’s earnings reports, with the three major indexes falling as investors wait to gauge just how much potential the artificial intelligence sector could have.
ASX Futures responded in kind, pointing to a 0.3% drop in early morning trading.
US and European markets
Nvidia fell 2.1% ahead of the closing bell, with further dips in Broadcom (NASDAQ:AVGO) (-2%) and AMD (NASDAQ:AMD) (-2.8%) while the Philadelphia SE Semiconductor index dipped 1.8%.
Rounding out the tech stock losses, Alphabet (NASDAQ:GOOGL) shed 1.13%, Microsoft (NASDAQ:MSFT) 0.78% and Amazon (NASDAQ:AMZN) 1.34%.
A delay in the release of its annual report lopped 19% off Super Micro Computer’s stock, just 24 hours after a short position for the company was disclosed by Hindenburg Research.
The S&P500 shed 0.6%, the Dow Jones 0.4% or 159 points and the Nasdaq 1.1% or 199 points.
In Europe, the bourses had a mixed performance. The Chemical sector lifted 1.4% to a two-month high – artificial flavour company Givaudan lifted 3.72% with rival Symrise AG gaining 3.3% and plastics company Covestro up 3.08%.
Resources fell 1.2%, the largest one-day loss in three weeks as metal prices were pushed down by weak Chinese demand and a strong US dollar.
The FTSE300 lifted 0.3% to touch its highest point since July while the UK FTSE100 ended flat – precious metal miners took 2.8% out of the market but the aerospace-defence and pharmaceutical sectors balanced the damage with 1.5% and 0.8% lifts respectively.
Nvidia falls
eToro market analyst Josh Gilbert joins us to discuss Nvidia’s eagerly awaited earnings report, which was released after US market close overnight.
"When you’re dubbed as the most important stock on the planet you’ve got to deliver and Nvidia has done exactly that once again, beating expectations across the board and showing that demand for AI remains solid,” Gilbert writes.
“Revenue jumped 122% year-over-year to $30.04 billion and its data centre revenue grew 154% to $26.3 billion, both smashing through estimates.
“Nvidia also announced an additional $50 billion buyback program, signalling its confidence in what's ahead after ending the quarter with a massive cash balance of $34.8 billion.
“What CEO Jensen Huang and his team are doing at Nvidia is nothing short of outstanding. They’re taking full advantage of the AI revolution and continuing to deliver every single quarter.
“The world’s biggest tech names are spending big. Meta, Microsoft and Alphabet are all growing their capital expenditures, and that cash is going straight to Nvidia because they’re the best in the business.
“Its outlook once again beat expectations, and after concerns that there may be delays, however, it foresees several billions of dollars in revenue from its new Blackwell chips.
“The market may be disappointed not to see a bigger beat on its outlook given what is now almost unattainable expectations but the bottom line here is that the long-term story remains intact, demand remains huge and the Juggernaut that is Nvidia rolls on."
Despite the strong results, Nvidia’s stock fell 6.86% in after hours trading, perhaps proving Gilbert’s point that current market expectations are simply unobtainable.
Currencies and commodities
The US dollar gained against major currencies overnight.
The Euro fell from US$1.1158 to near US$1.1120 by the US close, the Aussie slipped from US$0.6798 to near US$0.6780 and the Yen depreciated from JPY144.09 per US dollar to around JPY144.50.
Oil fell as US stockpiles fell less than expected by a factor of almost 3-fold, with Brent falling by US$0.90 (1.1%) to US$78.65 a barrel and US Nymex by US$1.01 (1.3%) to US$74.52 per barrel.
Copper shed 2% and aluminium 2.3% as base metals fell overall, joined by gold futures with a US$15.10 (0.6%) drop to US$2,537.80 per ounce (spot gold near US$2,502 per ounce).
Iron ore bucked the trend to gain US$0.06 (0.1%) to US$98.51 per tonne.
On the small cap front
The ASX Small Ordinaries fell 0.60% or 18 points yesterday, following the ASX200’s 0.15% drop.
You can read about the following and more on our website throughout the day.