U.S. stocks ended lower Wednesday trading as investors braced for what could be one of the most important corporate events in years after the close of trading with AI-chip maker Nvidia set to report its highly anticipated second quarter earnings.
The S&P 500 closed out the day 0.6% lower at 5,592.65 points, with the Nasdaq falling 1.12% and the Dow falling around 160 points following two consecutive record high closes.
S&P 500 Closing Bell Heatmap (Aug. 28, 2024)$SPY -0.60%🟥$QQQ -1.12%🟥$DJI -0.39%🟥$IWM -0.64%🟥 https://t.co/ViqMsO6iiX pic.twitter.com/TnYTEiYiKv
— Wall St Engine (@wallstengine) August 28, 2024
Updated at 12:40 PM EDT
Red mist
Stocks are drifting lower heading into the mid-day session, with the S&P 500 down 37 points, or 0.66%, and the Nasdaq off 204 points thanks in part to a 2% pullback for Nvidia.
The S&P 500 has a gap below. If we backtrack, it serves as a good short-term point of reference. $SPX pic.twitter.com/70z8tDn8qn
— Chris Ciovacco (@CiovaccoCapital) August 28, 2024
Updated at 10:59 AM EDT
Nvidia, Nvidia, have you seen Nvidia?
Nvidia shares are slipping lower in early trading, and were last marked 2% down on the session at $125.70 each, with all eyes on the AI chipmaker's second quarter earnings after the bell.
Some of the downdraft might be tied to Super Micro one of Nvidia's largest customers, and the AI server maker's move to delay its annual report while it addresses the ""effectiveness of internal controls"
Super Micro shares were down 24.1% in early trading, extending their six month decline to around 50%.
Related: Nvidia stock price tied to 5 key items in Q2 earnings report
Updated at 9:36 AM EDT
Muted open
The S&P 500 was marked 4 points lower, or 0.07%, in the opening minutes of trading, with the Nasdaq slipping 11 points. The Dow fell 72 points while the Russell 2000 was marked 15 points, or 0.67% lower.
S&P 500 Opening Bell Heatmap (Aug. 28, 2024)$SPY +0.01%🟩$QQQ +0.03%🟩$DJI +0.01%🟩$IWM -0.40%🟥 pic.twitter.com/IKuKUcrpbN
— Wall St Engine (@wallstengine) August 28, 2024
Updated at 9:13 AM EDT
Not so super
Super Micro Computer (SMCI) shares extended their recent run of declines after the AI server maker said it would delay the filing of its annual 10-K report with the Securities and Exchange Commission.
Super Micro, which was added to the S&P 500 in March, was the target of a short sellers report from Hindenburg Research Tuesday that alleged "significant accounting, governance and compliance issues" as well as an "inferior product and service now being eroded away by more credible competition".
Super Micro shares were marked 9.4% lower in premarket trading to indicate an opening bell price of $496.00 each.
$SMCI just announced that they’ll be delaying their 10-K Filing for FY 2024 😳 pic.twitter.com/KsYceDISrc
— Shay Boloor (@StockSavvyShay) August 28, 2024
Updated at 7:59 AM EDT
Kohl's call
Kohl's (KSS) shares jumped in heavy premarket volume after the upscale retailer posted better-than-expected fiscal-second-quarter earnings and boosted its full-year profit forecast even as it noted muted spending trends from belt-tightening customers.
As a result, Kohl's sees net sales falling between 4% and 6% this year, a bigger decline than its prior forecast of between 2% and 4%. But it added that tighter cost controls and inventory management will lift overall earnings.
Kohl's shares were marked 2.6% higher in premarket trading to indicate an opening bell price of $20.11 each.
$KSS Kohl's (KSS) reported fiscal Q2 earnings Wednesday of $0.59 per diluted share, up from $0.52 a year earlier. Analysts polled by Capital IQ expected $0.44. Net sales for the quarter ended Aug. 3 were $3.53 billion, compared with $3.68 billion a year earlier. Analysts surveyed… pic.twitter.com/ord2LZrxO8
— Marty Chargin (@MartyChargin) August 28, 2024
Stock Market Today
For much of the past year stocks have been tracking Nvidia's (NVDA) progress, and rising in its extraordinary wake, as investors see the chipmaker as the key barometer for AI-investment demand.
Nvidia stock, which has eased from its June record highs but has still added more than $1.22 trillion in value since late December, has driven around a third of the Nasdaq 100's year-to-date gain of 18.4%
Options pricing suggests markets are keenly on edge for the group's second quarter update, expected after the close of trading, and indicate a likely swing of around 9.8%, or $305 billion.
That would be the largest implied volatility for Nvidia earnings in more than three years, and the largest single-day move on record in terms of market value.
Wall Street is hoping that Nvidia's earnings, and the reading it will provide on AI demand heading into the back half of the year, will justify both is lofty $3.2 trillion valuation and the hundreds of billions in capital spending planned by tech giants such as Amazon (AMZN) , Google (GOOGL) , Meta Platforms (META) and Microsoft (MSFT) .
Related: Nvidia earnings key to market rally after Fed lays rate cards on table
And with the S&P 500 sitting just 0.77% from its July all-time peak, and the Federal Reserve set to begin a series of rate cuts over the coming months, starting in September, stocks are primed to either consolidate their hard-fought August gains or retreat into the autumn as election uncertainty takes hold.
With the stakes rising to a crescendo, Wall Street is set for a cautious start to the trading session, with futures contracts tied to the S&P 500 suggesting a 5 point opening bell gain and those linked to the Nasdaq priced for a 20 point advance.
The Dow Jones Industrial Average, which notched its second-consecutive record close last night to take its year-to-date gain to around 9.4%, is called 25 points higher.
In the bond market, benchmark 2-year note yields slipped to 3.863% following a solid auction of $69 billion in new paper yesterday, with 10-year notes easing to 3.825% heading into the start of the New York trading session.
More Wall Street Analysts:
- Analysts reboot Grand Theft Auto maker's stock price target
- American Express stock analyst flags concerning shift in consumer behavior
- Analyst resets Nvidia stock price target before earnings
In Europe, the regional Stoxx 600 benchmark hit a one-month high of 520.91 earlier in the Frankfurt session, while Britain's FTSE 100 was little-changed at 8,346.98 points.
Overnight in Asia, the Nikkei 225 ended 0.2% higher in Tokyo, while the region-wide MSCI ex-Japan benchmark edged 0.03% higher into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
