After the bell, Nvidia shares fall as Wall Street closes mixed

The Nasdaq, dominated by tech stocks, closed lower on Wednesday, pausing after the prior session's rally. Investors were weighed down by escalating Russia-Ukraine tensions and disappointing results from Target (NYSE), while anticipating earnings from Nvidia (NASDAQ) released after market hours.

The Dow Jones and S&P 500 gained ground late in the session, with the Dow ending higher and the S&P 500 finishing flat.

Early trading saw a decline across the market following reports that Ukraine launched long-range British Storm Shadow missiles into Russian territory. This followed Tuesday’s use of U.S.-made ATACMS missiles by Ukraine, prompting Russia to lower its threshold for nuclear action. Wall Street's volatility index, often referred to as the "fear gauge," climbed to 18.79 before retreating to 17.24, its highest level since the U.S. presidential election on November 5.

James Regan, Director of Wealth Management Research at D.A. Davidson, noted a defensive shift in the market. "After a strong rally in growth stocks and tech yesterday, there’s some caution today. Investors are likely reacting to geopolitical concerns, Target’s disappointing earnings, and possibly taking a conservative stance ahead of Nvidia’s results," he said.

Shares of Nvidia, a leader in AI chip manufacturing, slipped 0.76% during the session and fell further after-hours when its fourth-quarter revenue forecast slightly exceeded estimates but failed to meet some investors' high expectations. During the trading day, Nvidia's decline pulled down the Information Technology sector by 0.23% and contributed to the Nasdaq's 0.11% drop.

Target shares plummeted 21.4% after the retailer projected holiday-quarter sales and profits below expectations, compounding the impact of its third-quarter earnings miss. The consumer discretionary sector led declines, falling 0.57%.

Other major growth stocks also took a hit, with Tesla (NASDAQ) dropping 1.15% and Amazon.com (NASDAQ) declining 0.85%.

The Dow Jones Industrial Average rose by 139.53 points (0.32%) to close at 43,408.47. The S&P 500 added a negligible 0.13 points (0.00%) to end at 5,917.11, while the Nasdaq Composite fell by 21.32 points (0.11%) to 18,966.14.

Nvidia’s stock, which has nearly tripled in value this year, accounts for about 20% of the S&P 500’s returns over the last 12 months, according to BofA Global Research. Bill Merz, Head of Capital Markets Research at U.S. Bank, highlighted Nvidia’s strong position in the AI market. “We’re seeing larger companies report how their AI investments are driving revenue growth or cost savings, which is a positive sign for companies like Nvidia at the forefront of AI and tech infrastructure,” he said.

Cryptocurrency-related stocks moved higher as Bitcoin surged past $94,000. MicroStrategy gained 10%, while MARA Holdings rose 13.9%.

Market sentiment was also influenced by expectations that the Federal Reserve will keep interest rates steady at its December meeting, supported by strong economic data and persistent inflation indicators.

Declining stocks outnumbered advancing ones by a 1.24-to-1 ratio on the NYSE, with 184 new highs and 94 new lows recorded. On the Nasdaq, 2,007 stocks advanced while 2,245 declined, resulting in a 1.12-to-1 ratio of decliners to advancers. The S&P 500 logged 30 new 52-week highs and 13 new lows, while the Nasdaq Composite saw 92 new highs and 163 new lows.

Trading volume on U.S. exchanges reached 13.20 billion shares, slightly below the 20-day average of 14.32 billion.

 

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.