Nvidia Surges 14%, US Treasury Yields Rise, and Market Watchers Eye More Fed Rate Hikes
By Shares of Nvidia (NVDA) surged 14% on Thursday after the software company posted better-than-expected results in the previous quarter while boosting current quarter guidance, and said chip demand for artificial intelligence (AI) applications, such as ChatGPT, is surging.[0] The strong results coincided with an unexpected drop in weekly jobless claims to 192,000 and a revised 2.7% gross domestic product for the fourth quarter.[1]
On Wednesday, the 10-year U.S. Treasury yield decreased to 3.92% following the publication of the minutes of the most recent Federal Reserve policy meeting.[2] The 10-year yield rose to 3.93% Thursday morning, which would be the fifth consecutive weekly increase if it holds.[3] Ending a six-day downturn, U.S. crude oil prices jumped up by almost 2% to $75.39 per barrel.[4]
Pre-market trading saw a drop of more than 4% for eBay (EBAY), as the company reported a decrease of 9% year-over-year in active buyers, resulting in the seventh consecutive quarter of decline. Additionally, they anticipate a “challenging” margin outlook in 2021.[5] Unity Software has dropped by over 8% after expecting full-year revenue to be lower than what analysts had predicted.[6] Dollar General's stock dropped by over 4% after the company revised its predicted Q4 earnings per share downwards.[6]
Many market analysts anticipate that the Federal Reserve will raise rates twice more during the spring, with a 0.25% increase in March, another in May, and possibly an additional one in June.[7] Dow Jones consensus estimates anticipate that personal income increased by 1.2% in the prior month.[8] The figure rose from a 0.2% increase in the preceding month.[9] It is predicted that consumer expenditure will increase by 1.4% in January, after having dropped by 0.2% in the month prior.[9] Friday morning will see the release of the Federal Reserve's favored inflation measure, the personal consumption expenditures price index.[10]
On the positive side, Nvidia is launching new AI cloud services in partnership with leading cloud-infrastructure providers, such as Microsoft, Alphabet, and Oracle.[11] Nvidia's AI supercomputer, software, and generative AI models will be more accessible to customers with these AI-as-a-service offerings.[12] Meanwhile, the Nasdaq Composite (COMP.IND) closed +0.7%, the S&P 500 (SP500) finished +0.[13]
0. “Nvidia Shares Soar on Earnings Beat, Chip Demand for AI Applications” Investopedia, 23 Feb. 2023, https://www.investopedia.com/nvidia-shares-soar-on-earnings-beat-chip-demand-for-ai-applications-7112912
1. “Stock Market Today: Nasdaq Outperforms as Nvidia Outlook Impresses” Kiplinger's Personal Finance, 23 Feb. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-022323-nasdaq-outperforms-as-nvidia-outlook-impresses
2. “Dow Jones Futures Rise: Nvidia Earnings Lift Chips; S&P 500 Set To Bounce From Key Support | Investor's Business …” Investor's Business Daily, 23 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-nvidia-jumps-on-earnings-sp-500-tests-critical-support/
3. “Dow Jones Rises After Key Economic Data; Nvidia Surges On Earnings, Lucid Crashes On Sales Miss” Investor's Business Daily, 23 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-rise-ahead-of-key-economic-data-nvidia-surges-on-earnings-but-lucid-plunges/
4. “Dow futures rise 85 pts; bullish Nvidia guidance boosts sentiment By Investing.com” Investing.com, 23 Feb. 2023, https://www.investing.com/news/stock-market-news/dow-futures-rise-85-pts-bullish-nvidia-guidance-boosts-sentiment-3011926
5. “Stocks Higher Thursday Afternoon; Labor Market Shows Continued Strength” InvestorsObserver, 23 Feb. 2023, https://www.investorsobserver.com/news/market-updates/stocks-higher-thursday-afternoon-labor-market-shows-continued-strength
6. “Markets Today: Nvidia's Bullish Revenue Outlook Lifts Stock Index Futures” Barchart, 23 Feb. 2023, https://www.barchart.com/story/news/14481266/markets-today-nvidias-bullish-revenue-outlook-lifts-stock-index-futures
7. “Bears Have the Edge as the Market Awaits More Inflation Data” RealMoney, 23 Feb. 2023, https://realmoney.thestreet.com/markets/bears-have-the-edge-as-the-market-awaits-more-inflation-data-16116648
8. “Dow Jones Futures: Nasdaq Rallies Up To Resistance On Nvidia; All Eyes On PCE Inflation Report | Investor's …” Investor's Business Daily, 23 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-nasdaq-rallies-up-to-resistance-on-nvidia-all-eyes-on-pce-inflation-report/
9. “Stock futures slip as investors await key inflation and consumer data: Live updates” CNBC, 23 Feb. 2023, https://www.cnbc.com/2023/02/23/stock-market-today-live-updates.html
10. “S&P 500 snaps 4-day losing streak as stocks end choppy session higher” msnNOW, 23 Feb. 2023, https://www.msn.com/en-us/money/markets/sandp-500-snaps-4-day-losing-streak-as-stocks-end-choppy-session-higher/ar-AA17PVqK
11. “Nvidia Gains After AI Computing Demand Helps Lift Forecast” Yahoo! Voices, 23 Feb. 2023, https://www.yahoo.com/now/nvidia-gives-strong-forecast-ai-215407833.html
12. “Here's Why Nvidia Stock Surged Today” The Motley Fool, 23 Feb. 2023, https://www.fool.com/investing/2023/02/23/heres-why-nvidia-stock-surged-today/
13. “S&P 500 breaks 4-day losing streak on strong Nvidia results; Nasdaq, Dow also rise” Seeking Alpha, 23 Feb. 2023, https://seekingalpha.com/news/3940189-sp-500-breaks-4-day-losing-streak-on-strong-nvidia-results-nasdaq-dow-also-rise
