Nvidia's Earnings Beat Expectations Amid AI Boom and Export Restrictions

Nvidia earnings, new Stellantis CEO, Japanese bond auction - what's moving markets By Investing.com

Investing.com - U.S. stock futures retreated slightly Wednesday ahead of key earnings from Nvidia, the tech giant which has been one of the main beneficiaries of the AI craze. Stellantis (LON:0QXR) has appointed a new chief executive, and a poorly-received Japanese bond auction has raised concerns over demand for long-dated paper. 1. Nvidia's quarterly earnings loom large The marquee event Wednesday will be the release of quarterly earnings from Nvidia (NASDAQ:NVDA), with the chip giant widely seen as a bellwether for the tech industry. Nvidia releases its first-quarter results after the close, and is expected to report a 66% surge in revenue to just over $43 billion for the three months to April 31, both up substantially from last year. The company is expected to have benefited greatly from sustained demand as Wall Street's so-called AI hyperscalers continued to pour billions into data centers and cloud infrastructure. That said, the focus is likely to be on Nvidia's outlook, especially as the company grapples with stricter U.S. controls on chip sales to China. Uncertainty surrounding this major market looms large even as a pullback in other regulations is set to open up new markets. A shift towards AI inference from training, which is less data intensive, as well as increased interest in less demanding AI models, also stand to dampen future chip demand. Nvidia's shares have tended to underperform after the company's earnings over the past three quarters, given lofty expectations, and traders are bracing for industry-wide volatility, with defensive options contracts on a major semiconductor ETF drawing heavy attention. 2. U.S. futures slip ahead of Nvidia's release U.S. stock futures slipped slightly lower Wednesday, handing back some of the previous session's strong gains ahead of the release of quarterly earnings from AI darling Nvidia. At 03:40 ET (07:40 GMT), the S&P 500 futures traded 9 points, or 0.2%, lower Nasdaq 100 futures dropped 30 points, or 0.1%, and Dow futures fell 70 points, or 0.2%. The main average posted strong gains on Tuesday, after President Donald Trump announced the postponement of a 50% tariff on European Union imports to July 9. The blue chip Dow Jones Industrial Average rallied more than 700 points, or 1.8%, the broad-based S&P 500 gained 2%, and the tech-heavy Nasdaq Composite advanced roughly 2.5%. Investors are awaiting results from tech giant Nvidia [see above], while there are also earnings due from the likes of Macy's (NYSE:M), Abercrombie & Fitch (NYSE:ANF) and Dick's Sporting Goods (F:DKS). Investors will also keep an eye on the minutes from the May Fed meeting, due later in the session, for clues of future monetary policy amid a period of economic uncertainty. 3. Japanese bond auction raises long-end concerns Investors will also be watching developments in global bond markets after demand on Wednesday for Japan's 40-year government bond auction was its lowest since November. The auction's bid-to-cover ratio, which gauges total bids against the amount of securities on offer, sank to 2.2 from 2.9 at the previous sale in March. Long-end yields have surged worldwide in recent weeks on a heavy selloff in bonds as concern mounts over fiscal deficits, particularly in developed nations such as the U.S. and Japan. The U.S. Treasury Department saw soft demand for a $16 billion sale of 20-year bonds last week, with investors worried about the country's increasing debt burden as Congress debates a tax and spending bill that is expected to worsen the fiscal outlook. It comes after Moody's cut the United States' sovereign rating from the top "Aaa," adding to previous downgrades from Fitch Ratings and Standard & Poor's. Wednesday sees the auction of shorter-dated U.S. two-year floating rate and five-year notes, as well as a German auction of 15-year Federal bonds. 4. Stellantis appoints new CEO Auto giant Stellantis (NYSE:STLA) has appointed Antonio Filosa as its new Chief Executive Officer, succeeding Carlos Tavares, who departed in December following a steep drop in profits and sales, which raised concerns over his leadership. Filosa will also be proposed for election to the Board at an upcoming Extraordinary Shareholder Meeting. Until then, he has been granted full CEO authority to ensure a smooth transition. "The Board selected Antonio Filosa to be CEO based on his proven track record of hands-on success during his more than 25 years in the automotive industry, the depth and span of his experience around the world, his unrivalled knowledge of the Company and his recognized leadership qualities," Stellantis wrote in the announcement. Filosa has held several key leadership roles within Stellantis, most recently as Chief Operating Officer of the Americas. 5. Supply concerns help crude prices higher Oil prices edged higher Wednesday, as concerns over potential new sanctions on Russia raised supply disruption fears, although trading ranges are tight ahead of a pivotal OPEC+ meeting later this week. At 03:40 ET, Brent futures climbed 0.6% to $63.96 a barrel, and U.S. West Texas Intermediate crude futures rose 0.7% to $61.29 a barrel. The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting this weekend. OPEC+ has been in the process of unwinding output cuts, announcing additions to the market in May and June. As investors prepare for this increased supply, they also digested comments from U.S. President Donald Trump, who said that Russian President Vladimir Putin was "playing with fire", and Trump is considering new sanctions against Russia. This could put Russian energy flows at risk and disrupt the global oil supply. Investors also await the American Petroleum Institute's weekly inventory report, which has been delayed this week due to the U.S. Memorial Day holiday on Monday.

Wall St on track for muted open after sharp rally, focus on Nvidia earnings

(Reuters) -Wall Street was set for a subdued open on Wednesday after a sharp rally in the previous session, when cooling trade tensions boosted sentiment, as investors awaited AI leader Nvidia's results and minutes from the U.S. central bank's last meeting. Nvidia is expected to report a 66.2% surge in first-quarter revenue, according to data compiled by LSEG. Shares of the chipmaker rose 0.7% in premarket trading ahead of its earnings, due to be released after markets close. "There's kind of wait and see for Nvidia earnings tonight, which have become one of the big macro market movers both because of the leverage to the AI trade and the AI theme and also because of the linkages to global trade," said Ross Mayfield, investment strategist at Baird. Traders in the options markets are bracing for industry-wide volatility, with defensive options contracts drawing heavy attention for the VanEck Semiconductor ETF, the largest semiconductor ETF. At 08:17 a.m. ET, Dow E-minis were up 8 points, or 0.02%, S&P 500 E-minis added 8.75 points, or 0.15%, and Nasdaq 100 E-minis rose 59.5 points, or 0.28%. Most megacap and growth stocks pared gains after Tuesday's surge, with Nvidia up 0.7% and TSLA gaining 0.9%. All three main Wall Street indexes soared in the last session, after U.S. President Donald Trump backed down over the weekend from his threat of 50% tariffs on the European Union. The implementation of the tariffs is now delayed to July 9 to allow for negotiations between the White House and the EU. U.S. equities are on track for robust monthly gains, with the S&P 500 as well as the Nasdaq set for their best monthly showing since November 2023, as easing concerns around global trade, upbeat earnings and tame inflation data boosted risk appetite. The S&P 500 is now about 4% off its record closing high reached on February 19, falling as much as 18.9% below that level in the wake of Trump's erratic tariff announcements that have whipsawed markets for much of his second term. Minutes from the U.S. Federal Reserve's last policy meeting, when the central bank held borrowing costs steady, are slated for release at 2 p.m. ET. In earnings, Michael Kors-owner Capri Holdings fell 4.6% after reporting a wider-than-expected quarterly loss. New York Fed President John Williams said central banks must "respond relatively strongly" when inflation begins to deviate from their target, given the high uncertainty around the economic impact of U.S. tariffs and trade policy. Yields on long-dated U.S. government bonds were slightly higher after scaling multi-month highs last week. Those on the benchmark 10-year note were up marginally at 4.44%. Global bond markets have been in the spotlight lately over concerns about fiscal sustainability in major economies including the United States and Japan. Department-store chain Macy's rose 3.7% after it reported a first-quarter results beat. Cybersecurity firm Okta flagged risks related to the uncertain economic environment but stuck to its full-year outlook. Its shares dropped more than 12%. (Reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai)

Wall St edges lower as markets await Nvidia earnings

(Reuters) -Wall Street's main indexes fell slightly on Wednesday, after a sharp rally in the previous session sparked by easing trade tensions, as investors awaited AI bellwether Nvidia's results and minutes from the U.S. Federal Reserve's last policy meeting. Nvidia is expected to report a 66.2% surge in first-quarter revenue, according to data compiled by LSEG. Shares of the chipmaker slipped 0.2% ahead of its earnings, due to be released after markets close. "How AI demand plays out has far-reaching implications for the U.S. market as we head into June, and many will be waiting to see today's report before doubling into the May bounceback in risk," said Bob Savage, head of markets macro strategy at BNY. Traders in the options markets are bracing for industry-wide volatility, with defensive options contracts drawing heavy attention for the VanEck Semiconductor ETF, the largest semiconductor ETF. At 11:22 a.m. ET, the Dow Jones Industrial Average fell 102.80 points, or 0.24%, to 42,240.85, the S&P 500 lost 10.95 points, or 0.18%, to 5,910.59, and the Nasdaq Composite lost 10.66 points, or 0.06%, to 19,187.97. Most megacap and growth stocks shed initial gains and were mostly flat. Meta Platforms outperformed with a 0.5% rise. Ten of the 11 major S&P 500 sub-sectors fell, with energy and utilities being the biggest laggards. Dow component Salesforce was down 0.7% and is also scheduled to report earnings after the bell. All three main Wall Street indexes soared in the last session after U.S. President Donald Trump backed down over the weekend from his threat of 50% tariffs on imports from the European Union. The S&P 500 is now about 4% off its record closing high, reached on February 19, falling as much as 18.9% below that level in the wake of Trump's erratic tariff announcements that have whipsawed markets for much of his second term. A poll of strategists and analysts conducted by Reuters showed that many market participants expected the benchmark index to finish the year near current levels. Minutes from the U.S. Federal Reserve's last policy meeting, when the central bank held borrowing costs steady, are slated for release at 2 p.m. ET. Yields on long-dated U.S. government bonds were slightly higher after scaling multi-month highs last week. Global bond markets have been in the spotlight over concerns about fiscal sustainability in major economies including the United States and Japan. In earnings, Michael Kors-owner Capri Holdings advanced 4.8% after its fourth-quarter revenue beat analyst estimates. Shares of sportswear retailer Dick's Sporting Goods gained 1.2% after its first-quarter results beat estimates. Cybersecurity firm Okta flagged risks related to the uncertain economic environment but stuck to its full-year outlook. Its shares dropped nearly 14%. Declining issues outnumbered advancers by a 2.72-to-1 ratio on the NYSE and by a 1.91-to-1 ratio on the Nasdaq. The S&P 500 posted 21 new 52-week highs and no new lows, while the Nasdaq Composite recorded 51 new highs and 49 new lows. (Reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai)

Indexes end down after chip designers ease late; Nvidia jumps after the bell

NEW YORK (Reuters) -U.S. stock indexes closed lower on Wednesday as investors digested minutes from the last Federal Reserve meeting and shares of chip designers fell in late trading. After the closing bell, shares of Nvidia rose 5% as the artificial intelligence leader reported quarterly sales that beat analyst expectations. However, the chipmaker forecast second-quarter revenue below estimates. Nvidia shares had ended the regular session down 0.5%. Late in regular trading, shares of Cadence Design Systems and Synopsys dropped after the Financial Times reported that President Donald Trump's administration has ordered U.S. firms that offer software used to design semiconductors to stop selling their services to Chinese groups. The FT report cited people familiar with the move. Cadence ended down 10.7%. According to the minutes of the Fed's May 6-7 session, U.S. central bank officials acknowledged they could face "difficult tradeoffs" in coming months in the form of rising inflation alongside rising unemployment. "The Fed minutes really didn't reveal anything new," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "They basically indicate the Fed is in a wait-and-see mode and staying the line, trying to get more clarifications on trade." On Tuesday, stocks rose sharply after Trump backed down over the weekend from his threat of 50% tariffs on imports from the European Union. On Wednesday, the Dow Jones Industrial Average fell 244.95 points, or 0.58%, to 42,098.70, the S&P 500 lost 32.99 points, or 0.56%, to 5,888.55 and the Nasdaq Composite lost 98.23 points, or 0.51%, to 19,100.94. Also rising after the bell were shares of Broadcom, up 3.2%, and Advanced Micro Devices, up 1.5%. The S&P 500 is up 0.1% for the year to date but remains down from its record closing high, reached on February 19. It fell as much as 18.9% below that level in the wake of Trump's erratic tariff announcements that have whipsawed markets for much of his second term. A poll of strategists and analysts conducted by Reuters showed that many market participants expected the benchmark index to finish the year near current levels. Shares of sportswear retailer Dick's Sporting Goods ended up 1.7% after its first-quarter results beat estimates. Declining issues outnumbered advancers by a 2.79-to-1 ratio on the NYSE. There were 103 new highs and 34 new lows on the NYSE. On the Nasdaq, 1,448 stocks rose and 2,960 fell as declining issues outnumbered advancers by a 2.04-to-1 ratio. Volume on U.S. exchanges was 15.60 billion shares, compared with the 17.7 billion average for the full session over the last 20 trading days. (Reporting by Caroline Valetkevitch; additonal reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai and David Gregorio)

US stocks end lower, focus now on Nvidia results

STORY: U.S stocks finished lower Wednesday with the Dow, S&P 500 and Nasdaq all losing about half of one percent each. Shares of chipmakers including Cadence Design Systems and Synopsys fell in late trading. The Financial Times reported that the Trump administration has ordered U.S. firms that offer software used to design semiconductors to stop selling their services to Chinese groups. Other chip companies are dealing with U.S. government controls on their work, too. Nvidia said after the market close that it expects an $8 billion hit to sales from tighter U.S. curbs on exports of its AI chips to China, a key semiconductor market. Nvidia did beat quarterly sales expectations and its shares, which closed down half of one percent in regular trading, were up after-hours. Rob Haworth, senior investment strategy director with U.S. Bank Asset Management Group, says Nvidia's results are hugely important for the market. "Nvidia's significance to the market is still fairly large. They're no longer the largest company in the S&P 500, but they really sit at the center of artificial intelligence demand and supply at this point and so I think that's going to have a significant impact around it on the companies around it, right, the ecosystem around it. Particularly, it will tell us a lot about how other companies are doing." Meanwhile, Investors also assessed the minutes of the Federal Reserve's May meeting. U.S. central bank officials acknowledged they could face "difficult tradeoffs" in coming months in the form of rising inflation alongside rising unemployment.

Wall Street stocks end higher on Nvidia, trade talks hopes

NEW YORK (Reuters) -U.S. stock indexes closed higher on Tuesday, helped by gains in Nvidia and other chipmakers, as investors awaited possible negotiations between the United States and its trading partners for more clarity on Washington's tariff plans. President Donald Trump and Chinese leader Xi Jinping are set to speak this week, the White House said on Monday, days after Trump accused China of violating a Geneva agreement to roll back tariffs and trade restrictions. Beijing said it would safeguard its interests and that the accusation was groundless. The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters. "The most important thing for investors is that the administration wasn't going to impose those much-larger-than-expected tariffs and just leave them on, which would have almost certainly led to a recession," said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management. "The fact that the U.S. is actively engaged with so many trading partners - China, the UK, Japan, the EU, etc. - has investors feeling more optimistic that we will avoid a recession." In May, a softening of Trump's harsh trade stance allowed a recovery in risky assets, with the benchmark S&P 500 and the tech-heavy Nasdaq posting their biggest monthly percentage gain since November 2023. The Dow Jones Industrial Average rose 214.16 points, or 0.51%, to 42,519.64, the S&P 500 gained 34.43 points, or 0.58%, to 5,970.37 and the Nasdaq Composite gained 156.34 points, or 0.81%, to 19,398.96. Information technology stocks rose 1.5%, boosted by 2.9% gains in Nvidia. Chipmaker Broadcom hit a fresh record high after the company said it has begun to ship its latest networking chip that aims to speed AI. It rose 3.2% "Commentary that Trump and Xi will speak started getting discussed yesterday and chips are likely a topic on the table," said Angelo Zino, a senior equity analyst at CFRA Research. "Given Nvidia is essentially currently locked out of China, any discussion is prone to favor Nvidia and chips rather than hurt the story." A U.S. Labor Department report showed job openings increased in April, but layoffs picked up, signaling a slowing labor market as tariffs impact the economic outlook. Factory orders dropped sharply in April, as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department's Census Bureau showed a 3.7% fall, after an unrevised 3.4% jump in March. Monthly jobs data on Friday will offer more signs on how trade uncertainty is affecting the world's biggest economy. Shares of Wells Fargo were trading higher in post market trading after the U.S. Federal Reserve announced that the bank will no longer have to operate under a $1.95 trillion asset cap the regulator imposed on the bank in 2018 following its long-running sales practices scandal. Wells Fargo shares ended the day 1.2% higher, but were trading 2% higher after the bell. Shares of Kenvue dropped 6%, leading declines on the benchmark S&P 500 index. The company, which makes consumer health products, said at a Deutsche Bank conference that retailers in the U.S. and China are destocking products due to uncertainty over tariffs. Dollar General surged 15.8% as the discount retailer raised its annual sales forecast after surpassing quarterly sales expectations. Shares of image-sharing platform Pinterest rose 3.8% after JPMorgan raised the stock to overweight from neutral. Shares of Reddit fell 1.1% after the social media platform was down for over 29,000 users on Tuesday, according to outage tracking website Downdetector.com. Volume on U.S. exchanges was 15.69 billion shares, compared with the 17.8 billion average for the full session over the last 20 trading days. Advancing issues outnumbered decliners by a 2.32-to-1 ratio on the NYSE. There were 171 new highs and 53 new lows on the NYSE. On the Nasdaq, advancing issues outnumbered decliners by a 2.07-to-1 ratio. The S&P 500 posted 31 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 99 new highs and 60 new lows. (Reporting by Kanchana Chakravarty and Sukriti Gupta in Bengaluru and Saeed Azhar in New York; Editing by Devika Syamnath and Aurora Ellis) By Saeed Azhar, Kanchana Chakravarty and Sukriti Gupta

Nvidia earnings take the spotlight

A look at the day ahead in European and global markets from Rae Wee Earnings results from Nvidia will be the marquee event for markets on Wednesday, with all eyes on how much U.S. technology curbs on China will cost the AI bellwether. Company watchers expect the chip giant to report a 66.2% surge in first-quarter revenue to $43.28 billion, however uncertainty surrounding its China business looms large even as a pullback in other regulations is set to open up new markets. As it is, traders in the options markets are bracing for industry-wide volatility after the results, with defensive options contracts on a major semiconductor ETF drawing heavy attention. Earnings aside, investors will also be watching developments in global bond markets after demand on Wednesday for Japan's 40-year government bond auction was its lowest since November, underscoring the market's diminishing capacity to absorb new debt. Long-end yields have surged worldwide in recent weeks on a heavy selloff in bonds as concern mounts over fiscal deficits, particularly in developed nations such as the U.S. and Japan. Worries over tax cuts and that the United States' chaotic tariff policy will stoke inflation and propel government spending have made investors increasingly nervous about holding long-dated sovereign debt. On Tuesday, Reuters' exclusive report that Japan is considering trimming the issuance of super-long bonds was followed by a drop in both yields and the yen. Yields on Japanese government bonds were little changed following Wednesday's auction. U.S. Treasury yields edged up slightly after falling the previous day. Over in New Zealand, the central bank cut its benchmark interest rate by 25 basis points and flagged a slightly deeper easing cycle than it forecast three months ago, underlining risk to economic growth from a sharp shift in U.S. trade policy. Key developments that could influence markets on Wednesday: * North America earnings: Nvidia, Bank of Montreal, NationalBank of Canada, DICK'S Sporting Goods, Macy's * U.S. auction of two-year floating rate, five-year notes * German auction of 15-year Federal bonds * German unemployment data for May * France Q1 GDP final reading, producer prices for April Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.