In the early trading hours of Wednesday, Wall Street experienced a slight downturn as investors and traders held their breath for Nvidia’s quarterly earnings release. This report is eagerly anticipated, as it could potentially serve as a crucial litmus test for the burgeoning AI chip revolution. The futures for the S&P 500 saw a decrease of 0.3%, and the Dow Jones Industrial Average futures fell by 0.2%, setting a cautious tone for the day.
Nvidia, a titan in the semiconductor industry, finds itself at the center of attention. The company’s financial results, due later in the day, have placed stock markets in Hong Kong, China, and Taiwan on high alert. These regions are pivotal for Nvidia, contributing over 45% of the company’s revenues in the third quarter. However, the anticipation has been tinged with anxiety as Nvidia’s stock slipped about 1.5% in premarket trading, following a 4.4% tumble on Tuesday. Despite this, Nvidia remains the S&P 500’s biggest gainer this year, boasting a 40% increase and achieving a market size comparable to Amazon.
Meanwhile, Palo Alto Networks, a leading security software maker, emerged as the biggest premarket loser, witnessing a 24% slide before the bell. This downturn came after the company adjusted its 2024 sales and billings guidance downwards, unsettling investors.
In contrast, Amazon experienced a slight uptick of less than 1% in off-hours trading. This follows the announcement that the e-commerce behemoth would be joining the Dow Jones Industrial Average, taking the place of Walgreens Boots Alliance before the market opens on Monday, as declared by S&P Dow Jones Indices.
Adding to the day’s financial news, HSBC Holdings reported a record profit before tax of $30.3 billion for 2023. However, this impressive figure still fell short of analysts’ expectations, due in part to a $3 billion impairment charge related to an investment in a Chinese bank. This led to a 3.8% drop in HSBC’s Hong Kong-listed shares in afternoon trading.
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Investors are also keenly awaiting the Federal Reserve’s minutes from its most recent meeting, hoping for insights into future monetary policy. With the central bank opting to maintain its benchmark lending rate in the previous meeting, the focus now shifts to potential rate cuts, with Wall Street eyeing June for possible action.
On the global stage, the Hang Seng index in Hong Kong and the Shanghai Composite in China both saw gains, driven in part by advancements in the tech sector. Conversely, Japan’s Nikkei 225 experienced a slight decline, despite positive export data indicating strong demand for chip-making machinery in China. As the day progresses, all eyes remain fixed on Nvidia’s earnings report. Its outcomes could signal broader implications for the technology sector and the ongoing AI chip revolution, potentially setting the tone for future market movements.
