Stock futures pointed lower early Thursday, led by technology stocks after Nvidia’s earnings report left investors disappointed.
Futures on the tech-heavy Nasdaq 100 were 0.2% down, but S&P 500 futures were flat, recovering from an initial slump, and Dow Jones Industrial Average futures rose 0.2%. There was a lack of direction Wednesday in anticipation of the chip maker’s earnings–the Dow eked out gains Wednesday, while the S&P 500 was flat and the Nasdaq Composite closed 0.1% down.
Nvidia’s earnings have become a key event for markets, and Wednesday’s report was no different. The company beat expectations in its fiscal third quarter, and its outlook for the January quarter also topped estimates.
But after Nvidia’s 195% gain so far in 2024, it wasn’t enough to lift the shares higher in after-hours trading–the stock dropped 2.1%.
“It had been hoped that the quarterly figures would help the market at least in the short term. However, the risk of a wave of profit-taking in the near future, because the rally seems too exaggerated to many investors, has not been averted by the figures,” CMC Markets analyst Jochen Stanzl said Thursday.
However, the post-earnings reaction could’ve been much worse–the stock fell 6.4% after its previous quarterly report at the end of August. Deutsche Bank strategist Jim Reid said the early futures action suggested that the “potential high-volatility event has broadly passed without major incident,” in a note early Thursday.
Geopolitical fears were still very much on the agenda as the Associated Press reported that Ukraine said Russia launched an intercontinental ballistic missile targeting the city of Dnipro overnight. Vladimir Putin updated Russia’s nuclear doctrine earlier this week, which spooked investors Tuesday.
Investors Are Getting Fearful and With Good Reason.
Investors aren’t exactly running scared, but they are definitely becoming more fearful.