Dow Jones futures rose early Thursday, along with S&P 500 futures and Nasdaq futures in particular. Nvidia (NVDA) jump in income.
X
The stock market rallied slightly after Nvidia’s results because of somewhat hawkish Fed minutes from the April 30-May 1 policy meeting. Many consumer and product names were also sold.
Nvidia posted earnings that comfortably beat quarterly views, led the rise and announced a 10-for-1 stock split. Stocks rose sharply.
The long-awaited Nvidia report has big implications for AI plays Broadcom (AVGO), Advanced Micro Devices (AMD), Taiwan Semiconductor (TSM) and Microsoft (MSFT) and those shares rose slightly in post-early trading.
Meanwhile, Summary (SNPS), Snowflake (Snow) and ELF is beautiful (ELF) was also reported on Wednesday night.
Shares of Nvidia and Eli Lilly are on the move IBD Leaderboard. Reserve stock is available on SwingTrader. Microsoft stock and Synapsis are among the IBD long-term leaders. Nvidia has stock IBD 50.
Dow Jones Futures Today
Dow Jones futures were up 0.1% versus fair value. S&P 500 futures rose 0.55%. Nasdaq 100 futures rose 0.9%. Nvidia stock is a major S&P 500 and Nasdaq 100 component.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Nvidia earnings
Nvidia revenue rose 461%, revenue rose 262%, the fourth straight quarter of triple-digit growth for both.
The AI chip leader guided higher in Q2 revenue, though not as much as before.
“The next industrial revolution has begun,” Nvidia CEO and founder Jensen Huang said in the earnings release.
Nvidia will split its shares 10-for-1. It raised its dividend by 150% to 10 cents, or 1 cent after the split.
Nvidia stock rose 6% in overnight trading, marking a move above 1,000 for the first time. Shares gained steam as executives talked about growth opportunities and the company’s latest AI chip and plans on a conference call. Shares fell 0.5% to 949.50 in the regular session on Wednesday. NVDA stock cleared a 922.20 cup-with-handle buy point last week.
Broadcom, AMD and Taiwan Semiconductor rose roughly 1.5%-4% overnight.
Super Micro Computer (SMCI) and Dell computer (Tel), both of which use Nvidia chips in their AI servers, are solidly superior.
Microsoft and Service now (Now), the two biggest software AI players, are superior.
Other revenues
While the electronics design software maker often offered weak guidance, earnings were short. SNPS stock fell slightly in extended action. Shares rose 0.3% to 573.13 on Wednesday. Synopsis stock has a handle buy point of 582.97.
Snowflake missed earnings, but earnings were solid while the data analytics software company also gave strong guidance. SNOW stock rose solidly overnight, but pared early gains. Shares rose 0.4% to 163.34 on Wednesday. The snowflake stock is still far from the 52-week high set in February.
ELF Beauty easily beat earnings once again but the cosmetics maker lowered its guidance after several quarters of consistently raising targets. After ELF shares fell more than 10% early in extended trading, shares of the low-cost cosmetics maker fell 2.1% between the 50-day and 200-day lines on Wednesday.
Stock market rally
The stock market’s rally saw moderate losses in major indices, with several leaders taking heavy gains.
The Dow Jones industrial average fell 0.7% in stock market trading on Wednesday. The S&P 500 index fell 0.3%. The Nasdaq composite fell 0.2%, returning from a new intraday all-time high. The small-cap Russell 2000 lost 0.8%.
Consumer stocks struggled on Wednesday. target (DGT) sold on weak earnings and guidance, but Urban clothes (Urban), Williams-Sonoma (WSM) and luxury home builder Dole Brothers (TOL) turned sharply lower despite seemingly solid results.
Energy and commodity stocks retreated. Copper prices sold off 4.9%, their biggest loss in nearly two years following a big run. U.S. crude futures are down 3.1% so far this week, falling 1.4% to $77.57 a barrel.
The 10-year Treasury yield rose 2 basis points to 4.43%.
Fed minutes from the April 30-May 1 meeting released Wednesday showed policymakers worried about the lack of progress in reducing inflation. However, fresh inflation and economic data from May 1 point to a cooling of inflation again. Fed Governor Christopher Waller, a policy hawk, noted the progress on Tuesday.
ETFs
Among growth ETFs, the iShares Expanded Technology-Software Sector ETF (VAT) Microsoft and ServiceNow were essentially equal with larger components. VanEck Vectors Semiconductor ETF (SMHUp 0.8%. Nvidia shares are the No. 1 holding in SMH, with Broadcom, AMD and DSM shares being the largest members. SNPS shares in both SMH and IGV.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) fell 0.5% and the ARK Genomics ETF (ARKG1% up.
SPDR S&P Metals & Mining ETF (XME) fell 2.4%. SPDR S&P Homebuilders ETF (XHBdecreased by 2.3%. Energy Select SPDR ETF (XLE) fell 1.85% and the Health Care Select Sector SPDR Fund (XLVrose 0.2%.
Industrial Select Sector SPDR Fund (XLIUp 0.1%. Fund Selection SPDR ETF (45decreased by 0.6%.
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What to do now
Nvidia earnings are finally over. are you ready
Futures suggest a positive market reaction to Nvidia’s results. If it goes to Thursday’s regular session, investors will find several buying opportunities.
But a negative reversal can trigger more selling. With consumer, commodity and some infrastructure plays winning recently, the market rally may not see weakness in AI.
So investors should be prepared. Pay special attention to your primary goals and keep your watch lists ready. But also have your exit strategies in place.
Read the big picture every day to stay in tune with market direction and leading stocks and sectors.
Follow Ed Carson on Threads @edcarson1971 and on X/Twitter @IBD_ECarson For stock market updates and more.
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