Waiting Room. The S&P 500 ended up pretty much exactly where it started on Wednesday.
The index closed down just 0.02%. It doesn't get much flatter than that!
The Dow Jones Industrial Average fell 113 points, or 0.2%. The Nasdaq Composite slipped 0.1%.
The stock market was essentially a waiting room for Nvidia's earnings report, which came after the bell. More on that below.
At 13.61 billion shares traded, volume on U.S. exchanges hit the second-lowest level of the year, according to Dow Jones Market Data. The lowest volume day was two Fridays ago. Chalk it up to peak vacation season, writes Mizuho's Daniel O'Regan. He points to a spike in out-of-office replies to an email blast he sent out earlier this morning.
"Most investors seem content to sit on their hands and wait for the print rather than put on meaningful risk ahead of what is arguably the most important earnings report of the quarter," he writes.
Daily trading volume on U.S. exchanges has clocked in below 14 billion just 41 times going back to the start of 2025. The following day, the S&P 500 has averaged a decline of 0.1%, and closed higher just 46.3% of the time.
Of course, none of those low-volume days were followed immediately by Nvidia earnings.
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Nvidia Is Looking Ahead
With listless chip stocks and a market on autopilot, Wall Street was hoping an old friend could jump-start the AI rally. Enter Nvidia.
The AI chip titan reported adjusted earnings of $2.22 a share on revenue of $96.2 billion, clearing the consensus among analysts on both items, my colleague Adam Levine reports. The firm's outlook for the current fiscal year was less well received. Adam writes:
The company projected sales of $108 billion for the third quarter, which would mark its first quarter above the $100 billion mark. That surpasses Wall Street expectations of $105 billion.
But Nvidia bears have been waiting for slippage in the company's 75% adjusted margin, and that looks to be happening, with the company guiding to 74%. Wall Street could react unfavorably to any sign that Nvidia is losing its vaunted pricing power.
That revelation sent the stock briefly lower. Then came the earnings call. Adam writes:
During its second-quarter earnings call this afternoon, Nvidia took the unusual step of giving investors a peek into fiscal 2028, which begins at the end of January. Chief Financial Officer Colette Kress said that revenue would grow by around 70% next year; Wall Street has been looking for growth of 45%.
Kress also noted that the outlook included supply constraints, which put a ceiling on sales.
At last check, Nvidia was up nearly 7%. The iShares Semiconductor ETF was up more than 2%. We'll find out soon if that's enough to wake up the market.
You can read Adam's full coverage of Nvidia earnings here.
The Calendar
Alibaba Group Holding, Deere, NetEase, Ross Stores, and Walmart announce quarterly results tomorrow.
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