The tech-heavy Nasdaq slipped in choppy trade on Thursday, constrained by weakness in Nvidia shares, as uncertainty around the Sino-U.S. trade war forced the AI chip giant to leave out potential China sales from its quarterly forecast.
The exclusion came despite the company having secured certain licenses earlier this month to sell its H20 chips to major market China, after reaching a revenue-sharing deal with the U.S. government.
Nvidia’s shares were last down 2.6% in volatile trade, as some analysts also raised concerns about whether the company’s data center results hinted at tighter spending by cloud providers.
The broader S&P 500 technology sector reversed early gains and dropped 0.5%, while the chip index slipped 0.2%.
Still, Nvidia’s strong quarterly revenue forecasts, $60 billion share buyback plan and CEO Jensen Huang’s upbeat comments placated investor concerns around artificial intelligence demand.
“These results are good for a normal company in normal times, but Nvidia is neither. The lack of China revenue anduncertainty around future shipments is a concern. The longer this takes, the more entrenched domestic (China) alternatives become,” said Paul Meeks, managing director at Freedom Capital Markets.
Wall St edges up ahead of Nvidia results
The enthusiasm around AI earnings prospects was the driving force behind Wall Street’s bull-market run that started nearly three years ago. The rally has survived multiple hiccups this year, including the unveiling of cheaper Chinese AI models and the U.S. tariff-induced selloff in April.
Semiconductor peer Advanced Micro Devices was flat, while Super Micro Computer and major customers of Nvidia, including Meta and Microsoft, were marginally lower.
Data analytics company Snowflake gained 16.2% after raising its forecast for fiscal 2026 product revenue, citing AI demand. HP Inc beat estimates for third-quarter revenue on growing demand for AI-powered personal computers, sending shares up 3.4%.
At 09:59 a.m. ET, the Dow Jones Industrial Average fell 64.01 points, or 0.14%, to 45,501.22, the S&P 500 lost 12.27 points, or 0.19%, to 6,469.13 and the Nasdaq Composite lost 39.92 points, or 0.20%, to 21,547.73.
The other dominant theme behind the benchmark S&P 500’s rise to record highs has been expectations that the Federal Reserve could lower interest rates for the first time this year in September.
Traders are pricing in an 84.2% chance of a September rate-cut, according to data compiled by LSEG.
Placating worries of a slowing economy, weekly jobless claims were lower than expected, while a separate report showed corporate profits rebounded in the second quarter.
The spotlight is now on Friday’s Personal Consumption Expenditures data, and any signs of inflation increasing could temper expectations for a September rate cut.
Coming later in the day are remarks from Fed Governor Christopher Waller, who is perceived as dovish and among the candidates being considered to replace Fed Chair Jerome Powell next year.
Uncertainty regarding central bank independence also remains, after U.S. President Donald Trump’s attempt to fire Fed Governor Lisa Cook earlier this week.
Among others, packaging food company Hormel Foods lost 13.8% after its quarterly profit forecast missed expectations.
Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.18-to-1 ratio on the Nasdaq.
The S&P 500 posted 20 new 52-week highs and three new lows while the Nasdaq Composite recorded 59 new highs and 21 new lows.
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