Nasdaq Surges 1% as Nvidia Gains Ahead of Earnings, Fed’s Powell to Speak at Jackson Hole
The Nasdaq ended the day on a positive note, finishing more than 1% higher, while the S&P 500 also saw gains. Investors were particularly optimistic ahead of Nvidia’s earnings announcement later in the week, which led to a jump in the company’s shares. Additionally, other technology-related stocks performed well, contributing to the overall positive market sentiment. The Dow Jones industrial average, however, remained relatively stable.
As investors looked ahead to the upcoming meeting of central bankers at Jackson Hole in Wyoming, the yield on the benchmark 10-year Treasury reached a 15-year high. One key event during the gathering will be Federal Reserve Chair Jerome Powell’s speech on Friday, which investors are eagerly anticipating.
The technology sector played a major role in driving the S&P 500 and Nasdaq higher, with semiconductor stocks also experiencing significant gains. Nvidia stood out among the semiconductor companies, as HSBC raised its price target on the stock to $780, making it the second-highest on Wall Street.
Having experienced a surge in its stock price throughout the year’s artificial intelligence tech stock rally, Nvidia is expected to forecast quarterly revenue above analysts’ estimates in its upcoming report. The company’s stock has risen by over 200% so far this year, while the Nasdaq itself has gained nearly 30%. Many consider Nvidia to be a leading player in the field of AI, and a positive catalyst from its earnings announcement would be highly beneficial.
In addition to Nvidia’s earnings report, investors are also keen to hear Powell’s comments at Jackson Hole. The concern is that the Federal Reserve will keep interest rates higher for a longer period, which has already resulted in increased U.S. Treasury yields. This, in turn, has raised worries about the potential impact of higher rates on both businesses and consumers.
Moving onto the market performance, the S&P 500 gained 0.70% or 30.42 points to close at 4,400.13 points. Meanwhile, the Nasdaq Composite rose by 1.55% or 206.65 points to reach 13,497.42. On the other hand, the Dow Jones Industrial Average fell slightly by 0.11% or 37.40 points, ending the day at 34,463.26.
Within the Dow, Johnson & Johnson shares experienced a decline after the healthcare conglomerate announced it would retain a stake of approximately 9.5% in its recently separated consumer health unit, Kenvue. Another notable decline among the Dow stocks was Goldman Sachs, as the bank revealed it was considering selling a portion of its wealth business.
In the tech space, Palo Alto Networks surged following a strong quarter and a forecast for annual billings above expectations. This alleviated concerns that arose due to the cybersecurity firm’s late Friday release of results. Additionally, VMware saw an increase in its stock price after the UK’s competition regulator granted clearance for Broadcom’s purchase of the cloud computing firm. Broadcom’s stock also experienced gains.
In conclusion, the Nasdaq’s positive performance, driven by the technology sector and Nvidia’s anticipated earnings, has contributed to an overall upbeat market sentiment. However, investors remain cautious as they await Jerome Powell’s speech at the Jackson Hole meeting, given the potential impact of the Federal Reserve’s monetary policy decisions on the market.