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Nvidia earnings boost tech stocks, but Fed speech looms
🇸🇬 Singapore /Economy & Trade

Nvidia earnings boost tech stocks, but Fed speech looms

From CNA · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News From a news agency Context piece
  • Blockbuster earnings from AI chip giant Nvidia propelled technology stocks higher on Thursday.
  • Despite Nvidia's gains, overall market movements were lackluster as investors awaited a crucial speech from the US Federal Reserve chairman.
  • Investors are focused on the Fed chairman's comments regarding inflation and interest rates, with concerns about rising bond yields and the global economy.

AI chip behemoth Nvidia delivered blockbuster earnings, significantly boosting technology stocks on Thursday. The company's performance shattered analyst forecasts, reporting second-quarter revenues that more than doubled year-on-year to a staggering $96 billion. This surge helped lift the tech-heavy Nasdaq index by 1.6 percent.

The broader takeaway for AI remains highly constructive.

— Adam TurnquistLPL Financial analyst commenting on the implications of Nvidia's results for the AI sector.

However, the broader market showed a more cautious sentiment. While Nvidia and fellow tech titan Salesforce, which soared over 22 percent on strong demand for its AI products, provided significant lifts, gains were not widespread across all sectors. The S&P 500 saw only the technology sector advance, with consumer discretionary, industrials, and real estate experiencing notable declines.

Nvidia's results imply the AI capital expenditure cycle is not slowing but, in Huang's words, continues at 'full steam.'

— Adam TurnquistLPL Financial analyst interpreting Nvidia's earnings report.

Investors are now keenly awaiting a key speech from US Federal Reserve Chairman Kevin Warsh at a central bankers' conference in Jackson Hole, Wyoming. Markets are seeking clarity on the Fed's strategy for combating inflation, which remains well above target, and its stance on potential interest rate changes. Previous communications from Warsh have been criticized for ambiguity, leaving investors frustrated.

I think investors have been frustrated thus far with the new chair of the Fed for lack of clarity as to what it would take for them to change rates and fight inflation, which currently is well above their target.

— Art HoganB. Riley Wealth analyst discussing investor sentiment regarding the Federal Reserve's approach to inflation.

Meanwhile, oil prices saw a rebound as diplomatic efforts continue to reopen the Strait of Hormuz. US officials are maintaining economic pressure on Iran, aiming to restore tanker and cargo traffic through the vital waterway, which has been operating at a fraction of pre-war levels amidst ongoing conflict. On the corporate front, French drinks company Pernod Ricard saw its stock drop after reporting a significant slump in annual profits, attributed to lower sales in the US and China.

shipping data continues to show traffic through the Strait running at a fraction of pre-war levels.

— David MorrisonTrade Nation senior market analyst commenting on traffic through the Strait of Hormuz.
About this summary

Originally published by CNA in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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