On Thursday, there was an increase in futures linked to the S&P 500, driven by the positive second-quarter performance of Nvidia, a leading chip manufacturer. This exceptional performance by Nvidia further amplified the excitement surrounding artificial intelligence.
S&P 500 futures demonstrated a rise of 0.5%, and Nasdaq 100 futures exhibited an even more significant increase of 1.1%. However, futures linked to the Dow Jones Industrial Average faced challenges, experiencing a decrease of 0.1% or 38 points.
Nvidia’s stock experienced a surge of 8% following the release of its quarterly financial results, which surpassed the high expectations set by analysts. The company not only outperformed in terms of earnings and revenue but also raised its future guidance. The company’s executives forecasted that third-quarter revenue could reach $16 billion, reflecting a remarkable year-over-year growth of 170%.
For the second consecutive quarter, Nvidia has delivered a quarterly report that has far exceeded expectations. The numbers from the previous quarter, which were unveiled in May, played a crucial role in stimulating investor enthusiasm for artificial intelligence. This technology emerged as a significant market propeller in the initial six months of the year. The surge in interest surrounding this chip manufacturer propelled its market value to over $1 trillion.
Nvidia’s Strong Performance Boosts Tech Sector Confidence
Dan Ives, a senior equity research analyst at Wedbush Securities, commented, “Given that Nvidia serves as the purest and most reliable gauge of demand for artificial intelligence, the entire technology sector and the broader market had been eagerly anticipating their results.
In assessment, the outcomes and guidance provided a momentous affirmation that is comparable to a ‘drop the microphone’ situation. This occurrence is likely to create a ripple effect across the technology domain for the remainder of the year.”
The report had a positive impact on other companies in the chip making industry as well. Taiwan Semiconductor saw an increase of 3.4% in its stock value, while AMD experienced a rise of 2.7%. Marvell Technology also enjoyed a gain of 4.2%.
Investors are also eagerly anticipating remarks from Federal Reserve Chair Jerome Powell in Jackson Hole, Wyoming, on Friday. Wall Street is hopeful that these comments will shed light on the direction of benchmark interest rates.
Anticipated by Nvidia’s impressive second-quarter performance, semiconductor stocks were generally poised to commence the trading session with gains. The iShares Semiconductor ETF (SOXX) recorded a 2% increase.
Leading the surge, Nvidia shares surged by approximately 8%. In premarket trading, Marvell Technology, Taiwan Semiconductor, and Micron all registered a 3% uptick, while AMD saw a 2% advancement.
European Markets Begin the Trading Day With Gains
In the initial trading hours, the pan-European Stoxx 600 index exhibited a 0.9% increase, driven by a 1.9% surge in technology stocks that spearheaded the upward momentum. Notably, all sectors and major exchanges commenced the session in favourable territory.
India is Moving Towards Prohibiting the Export of Sugar
India is set to implement a ban on sugar exports starting in October due to diminished cane yields caused by insufficient rainfall, according to information from three government insiders cited by the report. This suspension of shipments would represent the first occurrence in the past seven years.
Reportedly, a government source stated, “The escalation in sugar prices, which has taken place recently, raises concerns about food inflation and renders the option of exports unfeasible.”
This proposed prohibition follows India’s prior ban on the export of non-basmati white rice, along with the imposition of a 40% export tax on domestically produced onions.
Summary
Nvidia’s exceptional Q2 performance drove positive market sentiment, reflecting in rising S&P 500 and Nasdaq 100 futures. Amid challenges faced by Dow Jones futures, Nvidia’s 8% stock surge, exceeding expectations, and elevated guidance highlighted its leadership in AI demand.
This tech momentum impacted chipmakers’ stocks, while anticipation for Powell’s insights on interest rates remained. European markets also started strong, while India’s sugar export ban responded to yield challenges.
