Nasdaq 100 futures saw a decline after Nvidia reported strong quarterly results that did not meet investors’ high expectations. Despite the AI chipmaker beating expectations in the second quarter and issuing a positive sales outlook for the current quarter, its shares dropped about 7% in extended trading. While Nvidia is still experiencing significant revenue growth, its performance fell short of what traders were anticipating this earnings season. Salesforce, on the other hand, saw a 3.5% increase in its shares after beating second-quarter estimates and raising its full-year profit outlook. However, cybersecurity company CrowdStrike lowered its full-year outlook following a global outage in July.
The broader market also saw losses after Nvidia’s results weighed on the major averages. The Nasdaq Composite dropped 1.12%, the S&P 500 fell 0.6%, and the Dow Jones Industrial Average slid about 159 points. Nvidia’s growing significance in the market was demonstrated through these movements, as the semiconductor company now accounts for roughly 7% of the S&P 500. Corporate earnings season continued with notable consumer names reporting, including Dollar General, Ulta Beauty, Lululemon Athletica, Campbell Soup, and Best Buy.
In its fiscal second quarter, Nvidia exceeded expectations on both the top and bottom lines, and issued a positive outlook for the current quarter. However, the size of the beat was smaller than in previous quarters, leading to a 7% drop in shares in extended trading. While the company is still experiencing strong revenue growth, traders had set expectations too high for this earnings season. This highlights the influence of Nvidia on the broader market, as its performance impacted the major averages and contributed to the overall losses.
Salesforce’s shares saw a 3.5% increase after the company beat second-quarter estimates and raised its full-year profit outlook. Meanwhile, CrowdStrike’s shares dropped 3.8% after the cybersecurity company lowered its full-year outlook following a global outage in July. Despite posting an earnings and revenue beat, CrowdStrike’s revised outlook resulted in a decline in its share price. The performance of these companies during earnings season reflects the impact of market expectations on stock prices and investor sentiment.
Looking ahead, the July personal consumption expenditures price index is set to release on Friday, providing further insight into the state of the economy. As corporate earnings season continues, investors will be closely monitoring the performance of key companies in various sectors. With notable consumer names reporting, including Dollar General, Ulta Beauty, Lululemon Athletica, Campbell Soup, and Best Buy, market dynamics and investor sentiment will continue to be influenced by their results. The overall performance of these companies will provide valuable information on the state of the economy and corporate sector.
