Markets drift as inflation stays elevated
The US sharemarket drifted through a quiet session on Wednesday ahead of Nvidia’s highly-anticipated results after new data showed inflation was slightly higher than economists expected, while US Treasury bond yields edged higher.
The S&P 500 slipped less than 0.1% and remained near its record high set earlier this month. The Dow Jones Industrial Average fell 113 points, or 0.2%, while the Nasdaq Composite declined 0.1%.
The US Federal Reserve’s historically preferred inflation measure was running at 3.7% last month, unchanged from June and slightly above the 3.6% economists had expected. It remains well above the Fed’s 2% target.
Growth in consumer spending also slowed, while revised figures showed the US economy expanded at a 1.5% annual pace in the spring, unchanged from the government’s first estimate.
The data pushed bond yields slightly higher. The yield on the 10-year US Treasury edged up to 4.65% from 4.64% late on Tuesday.
Traders made little change to their expectations for interest rates and were pricing in a nearly three-in-four chance the Federal Reserve would raise its main policy rate at least once by the end of the year, according to CME Group data.
Nvidia delivers after the closing bell
Investors had spent much of the session waiting for results from Nvidia, the largest company in the US share market by value and one of the biggest drivers of the artificial intelligence boom.
Those results landed after markets closed, with Nvidia once again beating Wall Street expectations as demand for its high-end AI chips remained strong.
The company reported quarterly revenue of $US96.22 billion, more than double the same period a year earlier and ahead of analysts’ average forecast of $US92.27 billion. Adjusted earnings were $US2.22 a share, compared with expectations of $US2.09.
Demand is also continuing to run ahead of supply.
“Our entire supply chain is challenged,” Nvidia chief executive Jensen Huang told analysts. “At this point we have supply for 70%. ... Our demand is much higher than that.”
Nvidia shares climbed 4.1% in after-hours trading after finishing the regular session 1.6% lower. The stock is up 12.4% so far this year.
The result will be closely watched when Wall Street reopens, given Nvidia’s weight in major US indexes and continuing questions over whether the huge sums being spent on AI infrastructure can generate sufficient returns. Nvidia’s market value has risen from about $US400 billion at the end of 2022 to roughly $US5.2 trillion.
Oil eases as investors watch the Persian Gulf
Oil prices remained volatile amid uncertainty over when tankers would be able to freely exit the Persian Gulf again.
Brent fell as low as $US84.56 before settling at $US86.94, down from about $US94 at the end of last week.
Elsewhere, share markets rose across much of Europe and Asia. South Korea’s Kospi gained 1%, while Japan’s Nikkei 225 added 0.6%.
The Associated Press
