Tech Turbulence: Nvidia Leads Market Retreat as Stocks Decline for Second Day
Tech Turbulence: Nvidia Leads Market Retreat as Stocks Decline for Second Day
By:JJ Kinahan
Earnings season continues as Walmart's revenue surges and HSBC's misses its profit goals suffers a profit miss
- Tech stocks are faltering, led by Nvidia, amid a broader market decline signaling potential volatility ahead.
- Earnings season is seeing mixed results; Walmart's revenue surge contrasts with HSBC's profit miss.
- Amazon's Dow inclusion, Bezos's stock sales and anticipation of Nvidia's earnings underscore market shifts.
Yesterday marked a second consecutive day of stock declines, with the S&P 500 slipping by 0.6% and the Nasdaq Composite dipping by nearly 1%. Notably, technology stocks bore the brunt, evidenced by a 4.4% drop for Nvidia (NVDA).
Among the famed magnificent 7 stocks, six closed lower, with Google parent Alphabet (GOOG) as the sole gainer, up 0.4%. Losses included Tesla (TSLA), down 3.1%, and Amazon (AMZN), which fell by 1.4%. Nvidia, though hit hardest, retains a robust year-to-date gain of nearly 40%, even after tripling in value last year. The company is set to report earnings after hours.
Earnings season continues
Earnings season remains in full swing. The revenue surge at Walmart (WMT), driven by increased foot traffic and not price hikes, hints at potential easing of inflation pressures or consumer shifts towards cost-effective shopping. The retail giant's $2.3 billion acquisition of TV maker Vizio (VZIO) aims to enhance direct consumer advertising opportunities.
Home Depot (HD) exceeded sales expectations despite a decline in revenue, resulting in a slight uptick in its stock. Conversely, HSBC (HSBC) missed profit forecasts, citing a $3 billion "valuation adjustment" linked to its stake in China's Bank of Communications.
Palo Alto Networks (PANW) beat revenue and profit estimates but lowered full-year guidance, causing a substantial premarket dip of 23%.
Fubo TV (FUBO) challenges ESPN, Warner Bros. Discovery (WBD) and Fox Sports' new sports streaming service, alleging forced broadcasting of unwanted content.
Other news
China's economic revival efforts include major bank cuts to the five-year loan prime rate, targeting the housing market's stability.
Amazon's addition to the Dow Jones Industrial Average, replacing Walgreens Boots Alliance (WBA), highlights its growing influence. Jeff Bezos's significant stock sales, totaling $2.4 billion, are sparking speculation, possibly driven by tax considerations amid looming fiscal policy changes.
Nvidia's impending earnings report, with analysts anticipating a 240% increase in revenue to $20.6 billion, underscores its market-moving potential. Future guidance will be crucial for investors navigating this volatile landscape.
JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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