Paris (AFP) – US shares fell and European stock markets mostly closed higher Wednesday as investors cautiously waited to see whether the latest earnings results from US chip giant Nvidia can justify the high valuations of tech stocks. Traders are also waiting for key US economic data later this week that could provide clues about the extent of an expected interest-rate cut next month.
In late morning New York trading, the Dow was little changed while the wider S&P 500 and tech-heavy Nasdaq were lower. In Europe, London’s FTSE 100 Index closed little changed, with Paris and Frankfurt closing higher. All markets were focused on the release of Nvidia’s second-quarter results after the close of US markets Wednesday. Nvidia earnings statements “have become an important macro event in their own right over recent quarters, with reactions that rival the sort of moves taking place after surprise jobs reports or CPI (inflation) releases,” said Jim Reid, an analyst at Deutsche Bank.
Nvidia is up about 160 percent year-to-date and has accounted for a third of the broad-based S&P 500 index’s gains this year. But its shares were down 3.2 percent in late morning trading. The market expects the company to post sales ranging between $27 billion and $32 billion, more than double from a year ago, said Swissquote Bank analyst Ipek Ozkardeskaya. The market has a “wait-and-see mentality,” said Patrick J. O’Hare, an analyst at Briefing.com, because Nvidia “is primed to move. Everybody knows that. What they don’t know is which way. So, the market is operating in a guarded fashion.”
The market could be in for a rough ride if Nvidia disappoints, analysts said. “This is the one that could either lift all boats or sink the entire fleet,” said analyst Stephen Innes in his Dark Side Of The Boom newsletter. Nvidia has seen profits soar thanks to demand for its powerful GPU chips, which have set the industry’s pace in pushing new advances in artificial intelligence.
Investors are also waiting for the release of US economic growth data on Thursday and the Federal Reserve’s favoured gauge of inflation on Friday, followed by jobs figures next week. Fed chief Jerome Powell said last week that the central bank was ready to cut rates, which were raised to a 23-year high in efforts to combat inflation, but he did not indicate by how much. The Fed’s next rate decision will be made at its September 17-18 meeting, with investors divided over whether the cut will be 25 or 50 basis points.
The dollar firmed somewhat Wednesday after losing ground recently on expectations of the Fed’s interest rate cuts, which reduces returns on US dollar assets. Oil prices slipped Wednesday, shedding some gains from earlier in the week when they jumped after the administration that controls eastern Libya said it would suspend oil production. But it remains unclear how many oilfields are really going offline.
– Key figures around 1540 GMT –
New York – Dow: DOWN 0.1 percent at 41,204.70
New York – S&P 500: DOWN 0.6 percent at 5,590.85
New York – Nasdaq Composite: DOWN 1.3 percent at 17,516.92
London – FTSE 100: FLAT at 8,343.85 (close)
Paris – CAC 40: UP 0.2 percent at 7,577.67 (close)
Frankfurt – DAX: UP 0.5 percent at 18,782.29 (close)
Tokyo – Nikkei 225: UP 0.2 percent at 38,371.76 (close)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 17,692.45 (close)
Shanghai – Composite: DOWN 0.4 percent at 2,837.43 (close)
Dollar/yen: UP at 144.38 yen from 143.96 yen on Tuesday
Euro/dollar: DOWN at $1.1127 from $1.1185
Pound/dollar: DOWN at $1.3201 from $1.3261
Euro/pound: DOWN at 84.27 pence from 84.34 pence
West Texas Intermediate: DOWN 0.9 percent at $74.92 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $78.92 per barrel
© 2024 AFP
