Nvidia's Earnings Shake Up the Markets Amid AI Growth Hopes

Nasdaq and S&P 500 futures saw a modest recovery on Thursday following Nvidia's forecasts that were mostly in line with expectations. Markets remain optimistic about potential interest rate cuts, though Nvidia's earnings raised some concerns. Key AI players like Microsoft and Meta saw slight gains in response.

Nasdaq and S&P 500 futures pared early losses and edged higher on Thursday following forecasts from AI chip firm Nvidia that were largely in line with expectations. Meanwhile, markets remained hopeful of upcoming interest rate cuts, with key economic data anticipated later in the day.

Nvidia's shares dipped 2% in premarket trading, despite the company's revenue and gross margin forecasts aligning closely with expectations for the current quarter. Ryan Detrick, chief market strategist at Carson Group, commented, "The size of the beat this time was much smaller than we've been seeing. Even future guidance was raised, but again not by the tune from previous quarters."

While semiconductor peers Broadcom and Advanced Micro Devices saw minor declines, Nvidia's megacap customers like Microsoft, Meta, Alphabet, and Apple posted gains, buoyed by optimism around AI integration boosting corporate profits. The Dow and S&P 500 futures showed modest gains as traders awaited Nvidia's results and potential signals for AI stock trajectories.

(With inputs from agencies.)