Stocks ended mixed Wednesday trading, as AI-chip maker Nvidia beat Wall Street's earnings expectations.
The Dow Jones Industrial Average lost 188.04 points, or 0.43%, to finish the session at 43,433.12, while the S&P 500 rose 0.01% to close at 5,956.06 and the tech-heavy Nasdaq rose 0.26% to finish the day at 19,075.26.
AI chipmaking heavyweight Nvidia reported fourth-quarter earnings after the bell that beat Wall Street expectations and the company provided strong guidance for the current quarter.
Nvidia reported net income of 89 cents per share, up from 49 cents a year ago and beating Wall Street’s call for 84 cents per share a year ago.
Revenue in the quarter rose 78% to $39.33 billion, exceeding forecasts $38.05 billion.
Nvidia expected about $43 billion in first-quarter revenue, plus or minus 2%, compared with forecasts of $41.78 billion.
Shares were flat at last check.
Updated at 12:52 PM EST
Game time
Nvidia shares are powering higher into its fourth quarter earnings report after the close, with investors braced for big potential after-market swings in the world's third most-valuable stock.
Options traders expect a 7.7% swing, in either direction, for Nvidia's share price in the wake of its Wednesday report, which based on the stock's $3.4 trillion market value could result in gains or losses of around $280 billion.
Nvidia is the bellwether and market-darling stock that is of vital importance to the broader markets," said Chris Brigati, chief investment officer at SWBC, an investment firm based in San Antonio.
"Its performance provides meaningful guidance for the broader market tone," he added. "The importance for the tech sector cannot be understated as the use of its chips are paramount for use in AI and related technology businesses."
Related: Nvidia earnings: 5 things to watch in the tech giant's crucial update
Updated at 11:10 AM EST
Tesla tumult
Tesla shares extended their 2025 retreat, following on from one of the worst declines since last October amid slumping global sales and brand erosion tied to the political activities of CEO Elon Musk.
The group's market value fell below the $1 trillion mark last night, but are still some 19% higher than they were prior to President Trump's election on November 4.
Tesla shares were last marked 1.25% lower in late-morning trading and changing hands at $298.94 each, a move that extends the stock's year-to-date decline past 21%.
Related: Analyst revisits Tesla stock price target amid uncertainty
Updated at 9:37 AM EST
Mixed open
The S&P 500 was marked 14 points, or 0.21% higher in the opening minutes of trading, with the Nasdaq rising 74 points, or 0.39%.
The Dow was little-changed from last night's close while the mid-cap Russell 2000 gained 11 points, or 0.49%.
"The stock market continues to churn amid mixed earnings and concerns about a slowing economy and consumer confidence," said Daniel Skelly, head of Morgan Stanley's Wealth Management Market Research & Strategy Team.
"So far, though, the S&P 500’s biggest pullback of the year is just that—a pullback," he added. "But there are certainly signs of market rotation, including the fact that, right now, there isn’t a single Magnificent 7 stock among the S&P 500’s top-20 percentage gainers so far this year."
S&P 500 Opening Bell Heatmap (Feb. 26, 2025)$SPY +0.28% 🟩$QQQ +0.34% 🟩$DJI +0.16% 🟩$IWM +0.25% 🟩 pic.twitter.com/zugH82nhZs
— Wall St Engine (@wallstengine) February 26, 2025
Updated at 9:25 AM EST
Payback
General Motors (GM) shares popped in early trading after the carmaker boosted its quarterly dividend by 25%, taking it to 15 cents per share, while unveiling plans to a $6 billion buyback.
“The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” said CEO Mary Barra.
Last month, posted better-than-expected fourth-quarter earnings and a solid profit forecast for the coming year, but shares have struggled over the course of the month as investors brace for 25% tariffs on goods from Canada and Mexico and reciprocal levies on auto imports from Europe over the coming months.
GM shares were marked 4.1% higher in premarket trading to indicate an opening bell price of $48.64 each.
$GM “why innovate?” pic.twitter.com/28hvF96Bk6
— Merlin Capital 🧙♂️ (@merlinscapital) February 26, 2025
Updated at 8:43 AM EST
Mortgage relief
U.S. mortgage rates fell to the lowest levels since mid-December last week, the Mortgage Bankers' Association reported, following a rally in Treasury bond yields that's added a morsel of support to the beaten-down housing market.
The average rate for a 30-year fixed loan slipped 5 basis points to 6.88%, the MBA said, but mortgage applications fell 1.2% and refinancings fell 4% as the broader market remains crippled by affordability issues and a lack of new supply.
“Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market," said the MBA's deputy chief economist Joel Kan. "Increasing for-sale inventory in some markets has provided prospective buyers more options as we approach the spring homebuying season.”
Now Available: February 2025 MBA Mortgage Finance Forecast! Download now to better understand and analyze different trends and changes in the industry - past and present - to strategize for the future: https://t.co/1i8SZ7W0GJ. pic.twitter.com/W5pL4vnaJD
— Mortgage Bankers Association (@MBAMortgage) February 25, 2025
Stock Market Today
Stocks ended firmly lower on Tuesday, dragging the S&P 500 into its fourth consecutive decline and deepening its February slump to around 0.95%. The market move comes amid persistent concern about the impact of tariff, immigration and foreign-policy objectives from President Donald Trump.
Investor focus Wednesday, however, is likely to shift back to corporate-earnings strength, particularly in the tech sector, with Nvidia (NVDA) and Salesforce (CRM) slated to update investors, and guide the market on near-term profits, after the closing bell.
Analysts expect Nvidia to forecast April-quarter revenue in the region of $41.75 billion, suggesting a 60% growth rate, with data center sales rising 65% to $37.21 billion.
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For the three months ended in January, Nvidia's fiscal fourth quarter, Wall Street is looking for overall revenue of $38.05 billion, a 72% increase from a year earlier, with data center revenue rising 82% to $33.6 billion.
Heading into the start of the trading day, stocks are also getting a boost from last night's budget blueprint vote on Capitol Hill, narrowly won by Republicans, which moves the broader process another step forward and increases the chance of extending the 2017 Trump tax cuts.
Related: Nvidia earnings can kickstart a comeback for U.S. stocks
Futures contracts tied to the S&P 500 suggest a 28-point opening bell gain, with the Dow Jones Industrial Average called 130 points higher.
The tech-focused Nasdaq is priced for a 110-point gain with Nvidia, Tesla (TSLA) and Palantir (PLTR) active in premarket trading.
Lowe's (LOW) shares were also in focus, rising 2.7% to $249.301, following its report of stronger-than-expected fiscal-fourth-quarter earnings and solid holiday-sales growth.
More Wall Street Analysis:
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- Veteran analyst sounds the alarm on Google and Mag 7
- Veteran stock analyst delivers blunt 3-word message on tariffs
Stocks in Europe, meanwhile, hit another all-time high in early Frankfurt trading following reports that the U.S. and Ukraine have agreed to a deal that would trade its rare earth mineral rights for as-yet publicly undisclosed military protection and financial support.
Overnight in Asia, Japan's Nikkei 225 hit a four-month low in early trading, but clawed its way to a 0.25% gain even with the yen extending further gains against the U.S. dollar.
The regionwide MSCI ex-Japan index, meanwhile, was marked 1.17% higher into the close of trading.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
