Nvidia’s Results, Apple Insights, and Harris Interview

Wall Street Set for Modest Gains Ahead of Labor Data and Earnings Reports

U.S. stock markets are anticipated to open slightly higher on Thursday as investors process the latest financial results from Nvidia, a prominent player in the AI sector. Today’s trading session also features additional corporate earnings reports, coinciding with an interview featuring Vice President Kamala Harris.

1. Nvidia’s Mixed Earnings Report Leads to Selloff

Nvidia recently reported quarterly earnings that surpassed analyst expectations, but disappointing guidance prompted a significant after-hours selloff. The company achieved adjusted earnings of $0.68 per share on revenues of $30.04 billion, exceeding predictions of $0.64 and $28.68 billion for the period ending July 28, and announced an extensive $50 billion stock buyback initiative.

A remarkable 154% increase in data center revenue, amounting to $26.27 billion, bolstered these quarterly results. However, the stock tumbled nearly 7% in after-hours trading, erasing approximately $200 billion in market capitalization. This decline was primarily driven by the company’s revenue guidance of around $32.5 billion for the current quarter, which fell short of some expectations, along with projections of a slowing growth rate compared to previous quarters.

Furthermore, Nvidia acknowledged challenges with its Blackwell line of advanced AI chips, although a launch is still slated for the fourth quarter. The immense demand for its AI chips has led Nvidia to consistently outpace analyst forecasts over recent quarters, elevating its market capitalization to over $3 trillion and briefly making it the world’s most valuable company in June. Despite the stock’s year-to-date rally of over 150%, this decline could simply present a buying opportunity for investors.

2. Mixed Futures; Nvidia’s Performance Influences Tech Sector

U.S. stock futures showed mixed results, with the tech-heavy Nasdaq lagging behind following Nvidia’s underwhelming performance. As of 04:05 ET, futures indicated an uptick of 155 points, or 0.4%, while other indices remained largely unchanged or slightly down.

Nvidia’s shares dropped about 7% in premarket trading despite positive earnings results. With the excitement over Nvidia’s results now subsiding, investors are shifting their focus back to the strength of the U.S. economy and its implications for future Federal Reserve monetary policy. Upcoming labor data and second-quarter GDP figures will be released later in the day, ahead of a crucial jobs report on Friday.

Investors are also looking forward to earnings reports from notable consumer brands, including Dollar General, Ulta Beauty, Lululemon Athletica, and Best Buy. Additionally, Salesforce and CrowdStrike will attract attention as they released their earnings after the market closed the previous day.

3. Apple Anticipates AI-Driven Surge in iPhone Sales

Apple is reportedly ordering components for a significantly larger number of iPhones compared to last year, signaling an expectation of an AI-driven increase in sales. The company has ordered parts for an estimated 88 to 90 million iPhones, marking an increase from previous orders of about 80 million.

Apple is set to unveil its latest flagship device, the iPhone 16, in early September, along with the introduction of new AI features across its devices. This surge in orders aligns with analysts’ predictions that AI innovations will drive a renewed growth phase in iPhone sales, which have faced a steady decline in the past year.

4. Vice President Harris to Participate in CNN Interview

Kamala Harris, alongside her running mate Tim Walz, is scheduled for an interview with CNN later today, marking her first media interview since becoming the Democratic candidate in late July. This follows President Joe Biden’s decision to suspend his re-election campaign.

Although Harris has engaged with journalists on various topics during her campaign, she has not conducted a formal one-on-one interview or a press conference. Harris shared broad policy outlines at the recent Democratic National Convention, promising a tax cut for the middle class and a robust foreign policy stance against Russia and North Korea. This interview could provide her with a platform to elaborate on these policies.

Additionally, U.S. Republican candidate Donald Trump is expected to debate Harris next month, providing voters with an opportunity to hear their policies presented side by side ahead of the November 5 election.

5. Crude Oil Prices Stabilize Amid Supply Concerns

Crude oil prices steadied on Thursday following two days of losses, as traders processed the potential for ongoing supply disruptions. As of 04:05 ET, U.S. oil futures traded flat at $74.52 per barrel, while Brent crude fell slightly to $77.52 per barrel.

After experiencing two consecutive days of declines, the oil market’s retreat came despite concerns over dwindling growth prospects in the United States and China affecting future demand. Key production disruptions in Libya, along with continued conflict in the Middle East, have kept traders cautious and added a risk premium to crude prices. Furthermore, Ukraine’s military reported strikes on Russian oil storage facilities, raising further supply concerns.

Despite the dip in oil prices, news that U.S. inventories decreased less than anticipated last week has intensified worries that demand may weaken as the busy travel season draws to a close.