The Wall Street’s main indexes fell on Wednesdaysince the Nvidia’s weakness caused a drop in the technology sector hours before the presentation of the chip manufacturer’s quarterly results, which were published after the close of trading.
The referential Dow Jones Industrials fell 0.4% to 41,091.42 points; S&P500 lost 0.6% to 5,592.18 points and the Nasdaq Composite depreciated 1.1% to 17,556.03 points.
What happened to the stocks?
The Shares of Nvidia, the world’s most valuable chipmaker, fell more than 2% and led the decline of the technology sector overall, as investors opted for caution. The company is expected to report earnings per share of about $0.644 on revenue of $28.68 billion, with both readings up from the previous quarter.
The company’s stock has soared 160% so far in 2024as the company has benefited greatly from increased investment in AI. It also makes the most advanced AI chips on the market and is considered a bellwether for AI demand.
The Super Micro Computer Inc shares plunged 20% and also weighed on the semiconductor sector after the AI server provider said it would delay the release of its quarterly results.
The announcement came a day after the short seller Hindenburg Research pointed to numerous problems at the company, including accounting difficulties and shipments of equipment to Russia and a Chinese entity that has been placed on the U.S. government’s watch list.
PVH leads mostly downbeat retail results
The PVH shares fell 7% after the high-end clothing giant, which owns brands including Calvin Klein and Tommy Hilfiger, reported a drop in second-quarter sales.
The Bath & Body Works shares fell 4.7% after the retail chain cut its annual sales forecast, a sign of weaker demand for its big-ticket items such as fragrances and scented candles amid still-high inflation.
In the meantime Abercrombie & Fitch fell 17% after the clothing chain’s chief executive, Fran Horowitz, warned of an “increasingly uncertain environment” as macroeconomic conditions worsened, even after the company raised its annual sales forecast.
For its part Kohl’s rose 0.3% as the department store raised its annual profit forecast after beating second-quarter earnings estimates, helped by tight cost control and lower inventories.
The Chewy shares rose more than 2% after the online pet supplies retailer reported strong second-quarter earnings, beating expectations.
Who will win the fight?
The The US Securities and Exchange Commission (SEC) has threatened to sue non-fungible token (NFT) marketplace OpenSeaits chief executive said in a post on social media platform X on Wednesday.
“OpenSea has received a Wells notice from the SEC threatening to sue us because they believe the NFTs on our platform are securities,” said OpenSea co-founder and CEO Devin Finzer.
A Wells Notice is a formal statement that the SEC staff intends to recommend enforcement action. “The SEC does not comment on whether or not a possible investigation exists”a spokesman for the securities regulator said in an emailed statement to Reuters.
The SEC and the cryptocurrency industry have clashed in recent years over their divergent views on whether crypto assets are classified as securities and should be regulated similarly.
“We are shocked that the SEC would take such a sweeping action against creators and artists. But we are ready to stand up and fight back,” Finzer added.
Cryptocurrency firms have accused the regulator of overreaching and violating its jurisdiction, while the SEC has alleged that the industry is flouting securities laws that are designed to protect investors and other market participants.
Major cryptocurrency firms including Coinbase (NASDAQ:COIN) and retail trading app Robinhood (NASDAQ:HOOD) have repeatedly called for clearer regulation and new laws to accommodate the fast-growing sector. “An NFT is a digital asset that exists on a blockchain, which serves as a public ledger, allowing anyone to verify the authenticity and ownership of the asset. NFTs have a unique digital signature and cannot be reproduced,” they state.
Source: Ambito
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