©Reuters. FILE PHOTO: Traders work at the New York Stock Exchange (NYSE) in New York City, U.S., January 9, 2024. REUTERS/Brendan McDermid//File Photo
By Chuck Mikolajczak
NEW YORK (Reuters) – Industrial stocks and the Dow Jones posted small gains on Wednesday, while the Nasdaq closed lower for a third straight session as investors await Nvidia’s (NASDAQ:) earnings release that could provide momentum short term for the economy. actions.
After the close, Nvidia shares rose 6% after it forecast fiscal first-quarter revenue above estimates on strong demand for its chips that dominate the artificial intelligence (AI) market.
During the session, Nvidia shares fell 2.85%, adding to the previous day’s decline of more than 4% for the chip designer.
Nvidia shares have risen nearly 40% this year, becoming the biggest gainer on the S&P 500 after jumping nearly 240% in 2023. Analysts had warned that its high valuation could make the stock vulnerable to a sharp decline if the company produced anything. unless there is a blowout report.
“It’s been driven by the excitement and enthusiasm about AI, and of course, the AI darling in the room is Nvidia,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.
“The markets are looking at Nvidia with some anxiety, maybe… we need to see a good relationship from the industry leader and that leader is Nvidia.”
The S&P 500 rose 0.13% to close the session at 4,981.80 points. The Nasdaq fell 0.32% to 15,580.87 points, while it rose 0.13% to 38,612.24 points.
Minutes from the Federal Reserve’s January meeting showed that most policymakers were concerned about the risks of cutting interest rates too soon, with wide uncertainty over how long borrowing costs are expected to remain at their current level .
After the minutes were released, U.S. short-term interest rate futures traders remained committed to their bet that the Fed will begin cutting interest rates no earlier than June.
Despite the modest advance, nearly all of the S&P’s 11 major sectors advanced, with only the heavily weighted technology index down 0.76%. Energy stocks posted gains with a rise of 1.86%.
Wall Street’s 2024 rally hit turbulence last week after data hinted at sticky inflation, raising concerns that the Fed would be in no rush to cut interest rates.
January inflation data complicates upcoming rate decisions, Richmond Fed President Thomas Barkin said.
Palo Alto Networks (NASDAQ) fell 28.44% after the cybersecurity company forecast third-quarter billings below analysts’ estimates.
Shares of other cybersecurity companies such as Fortinet (NASDAQ:), Zscaler (NASDAQ:), and Crowdstrike Holdings were weaker.
Amazon.com (NASDAQ:) is rising, with the company set to join the Dow Jones Industrial Average starting next week, replacing Walgreens Boots Alliance (O:), which has seen its shares fall.
Advancing issues have been about on par with declining issues on the NYSE. Declining issues outpaced advancing ones by a 1.73-to-1 ratio on the Nasdaq.
The S&P 500 recorded 25 new highs and no new lows; the Nasdaq recorded 47 new highs and 96 new lows.
Volume on U.S. exchanges was relatively light, with 10.5 billion shares traded, compared to an average of 11.7 billion shares over the previous 20 sessions.