Wall Street Rises Amid Strong U.S. Economy Data; Nvidia Slips

Wall Street's main indexes rose on Thursday following strong U.S. economic data. Nvidia slipped due to an in-line revenue forecast, while Apple saw gains after being chosen as Citigroup's top AI pick. Market dynamics were influenced by expectations for a September rate cut.

Wall Street's main indexes climbed on Thursday, driven by optimistic data indicating a still robust U.S. economy. However, Nvidia dipped as its forecast didn't surpass high investor expectations.

A report from the commerce department showed the U.S. economy grew faster than preliminary estimates, thanks to strong consumer spending. 'The economy is not slipping into a recession anytime soon and that's beneficial for the stock market, along with a rate cut that's very likely coming in September,' said Robert Pavlik, senior portfolio manager at Dakota Wealth.

Markets fluctuated between minor gains and losses ahead of Nvidia's results, with traders keen to see if the AI chip firm would maintain its exceptional revenue growth. Nvidia's forecast for the coming quarter met investor concerns, leading to a 2.0% drop in its shares.

'This is the first time that there has been criticism of the estimates beat and the outlook raise. It is not as great as some investors had anticipated,' remarked Peter Andersen, founder of Andersen Capital Management. 'Nvidia might be showing early signs of slowdown in capital expenditure for artificial intelligence.'

Other semiconductor firms like Broadcom and Advanced Micro Devices saw respective increases of 1.7% and 0.9%, contributing to a 1.2% rise in the Philadelphia SE Semiconductor index. Nvidia's major customers, Microsoft, Meta, and Alphabet, also saw gains exceeding 0.9% each.

Apple surged by more than 2% after Citigroup selected it over Nvidia as its top AI pick, helping the tech sector lead with a 0.9% rise. As of 9:48 a.m. ET, the Dow Jones Industrial Average had risen by 41.92 points or 0.10% to 41,133.34, while the S&P 500 gained 20.41 points or 0.36% to 5,612.59, and the Nasdaq Composite added 156.60 points or 0.89% to 17,712.62.

The benchmark S&P 500 is nearing a record high, with expectations for a September rate cut remaining strong. According to CME Group's Fed Watch Tool, the odds of a 25 basis point cut in September stand at 67.5%, while the chances for a larger 50 bps cut are at 32.5%.

A Labor Department report revealed jobless claims were slightly lower than expected for the previous week. Upcoming Personal Consumption Expenditure data for June might provide more insights into the central bank's monetary policy path.

Dow-component Salesforce exceeded Wall Street expectations for its second-quarter results, pushing its shares up by 1.1%. In contrast, CrowdStrike dropped 6.7% following reduced revenue and profit forecasts after last month's global tech outage.

Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the NYSE and by a 1.46-to-1 ratio on the Nasdaq. The S&P index recorded 20 new 52-week highs and 4 new lows, while the Nasdaq recorded 27 new highs and 41 new lows.

(With inputs from agencies.)