US stocks edged higher on Thursday as traders digested Nvidia’s latest earnings, which many saw as a fresh endorsement of the artificial intelligence boom.
The chipmaker, which accounts for about 8% of the S&P 500, reported a 56% surge in quarterly revenue, surpassing Wall Street estimates.
The S&P 500 and Nasdaq Composite opened higher on Thursday, with the broad market index up 0.2% and the tech-heavy Nasdaq gaining 0.4%.
The Dow Jones Industrial Average, however, hovered slightly below the flatline in early trading.
Even so, its data centre sales came in just under forecasts, and its revenue guidance of $54 billion for the current quarter was only slightly above analysts’ expectations of $53.1 billion.
The Nvidia stock dipped after the release but rebounded by the open, last trading about 1% higher.
Analysts noted that the company’s outlook excludes potential sales of its H20 chips to China, which could add further upside if regulatory hurdles are cleared under the Trump administration.
Wall Street firms, including JPMorgan, Citi and Bernstein, raised their price targets on Nvidia following the results, highlighting their conviction in the company’s long-term growth.
The upbeat outlook lifted sentiment across the semiconductor sector, with Broadcom and other chipmakers recovering from initial declines.
The S&P 500 and Nasdaq are both up more than 2% in August, while the Dow has gained over 3%, building on Wednesday’s rally that sent the S&P 500 to a record high ahead of Nvidia’s report.
Market participants have largely shrugged off concerns about the Federal Reserve’s independence after President Donald Trump attempted to dismiss Fed Governor Lisa Cook, a move she formally challenged in court this week.
Attention now turns to Friday’s inflation reading.
Economists expect the July personal consumption expenditures price index to rise 0.2% from the previous month and 2.6% from a year earlier, data that could further shape expectations around the Fed’s policy path.
US jobless claims slip
US jobless claims fell slightly last week, signalling that employers are retaining workers despite broader economic uncertainty.
Initial applications for unemployment benefits declined by 5,000 to 229,000 in the week ended August 23, compared with economists’ expectations of 230,000, according to Labor Department data released Thursday.
Continuing claims, which reflect the number of people already receiving benefits, also dropped to 1.95 million in the prior week.
That period coincided with the reference week for the government’s monthly employment report.
The labour market’s gradual cooling has become a key consideration for the Federal Reserve.
Investors are widely expecting the central bank to lower interest rates at its next policy meeting, after Chair Jerome Powell noted at Jackson Hole last week that “downside risks to employment are rising,” leaving the door open to a rate cut.
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