Coin Press - Global stocks diverge ahead of Nvidia earnings results

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Global stocks diverge ahead of Nvidia earnings results
Global stocks diverge ahead of Nvidia earnings results / Photo: ANGELA WEISS - AFP

Global stocks diverge ahead of Nvidia earnings results

US shares fell and European stock markets mostly closed higher Wednesday as investors cautiously waited to see if the latest earnings results from US chip giant Nvidia could justify the high valuations of tech stocks.

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The results, which landed shortly after markets closed on Wall Street, showed that Nvidia beat earnings expectations on growing demand for its data center chips.

But it added that sales grew more slowly than the furious pace seen in previous quarters.

Nvidia's share price extended losses in after-hours trading after the results were published.

All three major Wall Street indices closed lower, with the Nasdaq Composite taking the heaviest hit, ending the day down 1.1 percent.

"Over the past couple of weeks, Nvidia has been rising, with the anticipation being that the company is going to do better than expectations," Ventura Wealth Management's Tom Cahill told AFP before Nvidia's results were published.

He added that any forecasts from the firm that its explosive growth might slow "would be very negative for the stock and therefore technology stocks in the market."

In Europe, London's FTSE 100 Index closed little changed, with Paris and Frankfurt finishing the day higher.

- All eyes on Nvidia -

Nvidia's share price is up about 160 percent year-to-date, and has accounted for a third of the broad-based S&P 500 index's gains this year; it now has a market capitalization of more than $3 trillion.

Nvidia earnings statements "have become an important macro event in their own right over recent quarters, with reactions that rival the sort of moves taking place after surprise jobs reports or CPI (inflation) releases," said Jim Reid, an analyst at Deutsche Bank.

The company has seen profits soar thanks to demand for its powerful GPU chips, which have set the industry's pace in pushing new advances in artificial intelligence.

Another US company to report earnings Wednesday was the cybersecurity firm CrowdStrike, whose July 19 outage caused IT issues and travel chaos around the world.

The firm beat expectations for the quarter, while lowering its earnings guidance. Its shares rose 3.6 percent after hours.

Traders are also waiting for the release of US economic growth data on Thursday and the Federal Reserve's favored gauge of inflation on Friday, followed by jobs figures next week.

Fed chief Jerome Powell said last week that the central bank was ready to cut rates, which were raised to a 23-year high in efforts to combat inflation, but he did not indicate by how much.

The Fed's next rate decision will be made at its September 17-18 meeting, with investors divided over whether the cut will be 25 or 50 basis points.

The dollar firmed somewhat Wednesday after losing ground recently on expectations of the Fed's interest rate cuts, which reduces returns on US dollar assets.

Oil prices slipped Wednesday, shedding some gains from earlier in the week when they jumped after the administration that controls eastern Libya said it would suspend oil production. It remains unclear how many oilfields are going offline, however.

- Key figures around 2100 GMT -

New York - Dow: DOWN 0.4 percent at 41,091.42 points (close)

New York - S&P 500: DOWN 0.6 percent at 5,592.18 (close)

New York - Nasdaq Composite: DOWN percent 1.1 at 17,556.03 (close)

London - FTSE 100: FLAT at 8,343.85 (close)

Paris - CAC 40: UP 0.2 percent at 7,577.67 (close)

Frankfurt - DAX: UP 0.5 percent at 18,782.29 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 38,371.76 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 17,692.45 (close)

Shanghai - Composite: DOWN 0.4 percent at 2,837.43 (close)

Dollar/yen: UP at 144.50 yen from 143.96 yen on Tuesday

Euro/dollar: DOWN at $1.1119 from $1.1185

Pound/dollar: DOWN at $1.3194 from $1.3261

Euro/pound: DOWN at 84.27 pence from 84.34 pence

West Texas Intermediate: DOWN 1.3 percent at $74.52 per barrel

Brent North Sea Crude: DOWN 1.1 percent at $78.65 per barrel

M.Davis--CPN