Wall Street ignores Nvidia disappointmentTech stocks drive STOXX 600 to record highUSD rises as GDP data backs Fed to scale back rate cutsOil rises as Libyan supply worries counter small pullback in U.S. stocksGold rises as investors focus on Fed rate cut, inflation data
NEW YORK, Aug 29 (Reuters) – Global stocks edged higher on Tuesday despite investor disappointment over artificial intelligence company Nvidia's earnings, while oil prices recovered from two straight sessions of losses hit by supply disruptions in Libya.
Wall Street's major stock indexes rose, with the Dow Jones Industrial Average (.DJI) up 0.64% to 41,353.44, the S&P 500 (.SPX) up 0.72% to 5,632.22 and the Nasdaq Composite (.IXIC) up 1.07% to 17,744.52. European stocks (.STOXX) rose 0.75% to a record high, boosted by tech stocks. MSCI's World Stock Index (.MIWD00000PUS) rose 0.28% to 829.66. Nvidia on Wednesday reported second-quarter revenue of $30 billion and third-quarter revenue expectations of $32.5 billion, beating analysts' expectations. But the results failed to live up to the lofty expectations of investors that have helped drive Nvidia's stock's big gains and made the company one of the main drivers of the S&P 500 index. The company's shares were recently down 3.3%.
“Interestingly, Nvidia has performed about as well as everyone expected it to, and I would say it's outperformed expectations and far exceeded them,” said Mark Malek, chief investment officer at Siebert NXT in New York.
“But these days it's all about expectations, and people were expecting real fireworks.”
Data released by the Commerce Department on Thursday showed the U.S. economy grew at an annualized rate of 3.0% last quarter, suggesting there is room for the Federal Reserve to begin cutting interest rates in September. The yield on the 10-year U.S. Treasury note rose 2.6 basis points to 3.867%. While the market is fully pricing in a rate cut of at least 25 basis points (bps) at the Fed's September meeting, expectations for a 50 bps cut have fallen to 34.5% in response to the data, according to CME's FedWatch tool (opens in a new tab).
Investors are also keeping an eye on the release of the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, on Friday.
“The economy is doing a little better than expected. If you dig into the numbers again, it's the brave consumers that are continuing to spend, which is very positive for the economy,” Malek added.
The U.S. dollar strengthened after the GDP data was released. The dollar index, which measures the greenback's strength against a basket of currencies including the yen and the euro, rose 0.52% to 101.53, while the euro fell 0.53% to $1.1061.
Gold rose again, just shy of a new record high. Spot gold rose 0.51% to $2,514.89 an ounce. U.S. gold futures rose 0.63% to $2,518.30 an ounce.
Oil prices rose slightly as concerns over Libyan supplies offset a smaller-than-expected fall in U.S. crude inventories and dampened the demand outlook.
Brent crude futures rose 2.15% to $80.34 a barrel, while U.S. West Texas Intermediate crude futures rose 2.15% to $76.39.
Sign up here.
Reporting by Chibuike Ogu; Editing by Nick Zieminski
Our standards: Thomson Reuters Trust Principles. Opens in new tab
Purchasing License Rights
