(New York) Wall Street was trading in disarray shortly after the opening on Wednesday, showing caution ahead of the highly anticipated release of results from semiconductor champion Nvidia after the market closed.
As of 9:50 a.m. ET, the Dow was up 0.08%, while the NASDAQ index was down 0.47% and the broader S&P 500 index was down 0.11%.
The Dow Jones remains on two consecutive record highs at the close.
In a week poor in macroeconomic indicators and company results, the publication, after the close of the stock market, of Nvidia’s quarterly accounts has the market in suspense.
For more than two years, the Santa Clara group has been pulverizing market expectations, quarter after quarter.
It is boosted by demand for its now famous graphics cards, chips with increased computing capacities, essential for the development of so-called generative artificial intelligence (AI).
But after that long period of hovering, “there are concerns about their ability to announce targets that hold up,” said Quincy Krosby of LPL Financial.
“And even beyond that, to take stock of the demand from big tech players who have spent billions of dollars and still cannot monetize their AI infrastructure,” the analyst added.
“If today’s session is boring, it won’t be because the speakers aren’t interested, but because they’re waiting to hear what Nvidia has to say,” Briefing.com’s Patrick O’Hare said in a note.
By all accounts and based on futures activity, traders are expecting a sharp reaction to the chip giant’s release in post-market electronic trading and during Thursday’s session.
For Quincy Krosby, the decline in the indices also reflects the mood of investors who lack guidance for the weeks to come.
While they are convinced that a series of rate cuts by the American central bank (Fed) is about to begin, they are wondering about its pace.
They are also waiting to learn more about the trajectory of inflation with the publication of the PCE price index on Friday, and on employment with the monthly report on September 6.
Not to mention that September is traditionally a difficult month for stocks.
“All of these things combine to create uncertainty in the marketplace,” says Quincy Krosby.
On the bond market, the yield on 2-year US government bonds stood at 3.87%, compared to 3.90% the previous day at the close, the lowest since the brutal drop at the beginning of August.
Obsessed with Nvidia, the New York market has paid little attention to the good news coming from the distribution sector.
Department store chain Kohl’s (+5.87%) capitalized on a profit above expectations and the raising of its annual target.
Tom Kingsbury, the chief executive, nevertheless reported a “difficult environment for consumers”, who are showing “restraint in their purchases”.
Another good surprise in the retail sector was the ready-to-wear chain Abercrombie & Fitch, which exceeded analysts’ forecasts and revised its annual targets upwards.
The title was nevertheless in sharp decline (-13.41%), with the market expecting even more from this brand which is rising from its ashes after a long, difficult period.
Unlike Kohl’s, Abercrombie saw its revenue increase, as did athletic equipment chain Foot Locker, which grew for the first time in a year and a half.
Analysts, however, considered the sales growth forecast to be modest, with the stock plunging 14.96%.
Cosmetics retailer Bath & Body Works revised upwards its full-year net profit targets, but investors paid more attention to its disappointing sales figures for the previous quarter, and the stock fell 4.51%.
Server and remote computing infrastructure specialist Super Micro Computer continued its slide (-21.54%), after being accused on Tuesday of accounting manipulation by the hedge fund Hindenburg Research.