Stock futures in Wall Street show some recovery as Nvidia stock reduces losses. And the fact is that an initial drop in the three stock indices of that market was only recorded in prelude to the start of the stock market session.
The S&P 500 future shows a 0.4% drop in early trading in Europe, with traders reporting a nearly 4% drop in Nvidia shares after the intelligence chip maker’s results and forecasts artificial seems not to meet the high expectations of investors.
However, Nvidia is now down just 1.5%, which has helped S&P 500 futures rise again and trade almost flat. Analysts mostly view the relatively cautious reaction to Nvidia’s results as a positive for the broader market.
And Nvidia Corp. investors showed their disappointment in the company’s results by focusing on an anticipated slight drop in gross profit margins, but they are losing sight of what is important.
Nvidia’s GAAP gross margins — forecast at 73% for the company’s fiscal fourth quarter — remain enviable across the semiconductor industry. As one analyst told MarketWatch on Wednesday, “Many companies would tear their arm off by a margin greater than 70%.”
Wall Street: how the dynamics continue
Fears that the war between Russia and Ukraine is escalating helped lift oil and gold prices, while natural gas futures in Europe hit their highest level in a year. Ukraine reported that Russia fired an intercontinental ballistic missile during an overnight attack, while a Kremlin spokesman called Kyiv’s previous use of the UK’s Storm Shadow missiles a new escalation.
Traders are watching U.S. initial jobless claims later on Thursday for signs on the strength of the economy and the path of the Federal Reserve’s interest rates. Attention is also being paid to an expected decision on President-elect Donald Trump’s nominee for Treasury secretary.
“Trump’s victory has brought with it an increase in geopolitical uncertainty and that is also affecting sentiment,” said Daniel Murray, chief executive of EFG Asset Management based in Zurich, Switzerland. “Ukraine now has an incentive to gain as many strategic advantages as possible before Trump’s inauguration.”
Boston Federal Reserve Bank President Susan Collins said more rate cuts are needed, but policymakers must proceed cautiously to avoid moving too quickly or too slowly. Pricing in the swaps market indicated a around 50% chance that the Federal Reserve will cut rates again in December.
Source: Ambito
