NEW YORK: Wall Street’s main indexes were mixed on Thursday as Nvidia shares swung to losses after investors refocused on signs of increased AI spending in the industry, and data pointed to a cooling US economy.
Nvidia was down 3.5% - a contrast to outsized gains booked following some of its earlier results announcements. The company forecast upbeat quarterly revenue but its first-quarter gross margin outlook was below expectations.
Fellow chipmakers Broadcom and Advanced Micro Devices also fell, driving the broader chip index down 2.2%. Alphabet and Microsoft, among Nvidia’s biggest customers, slipped 1% and 0.3%.
The launch of low-cost AI models from China’s DeepSeek in January had cooled a two-year bull run on Wall Street, with Nvidia losing half a trillion dollars in market value in a single day. More recently, an analyst report suggesting Microsoft was scrapping some data center leases also raised concerns of overcapacity.
“Nvidia’s earnings were good but not like the blockbuster earnings that they’ve been delivering for a while,” said Scott Welch, chief investment officer at Certuity.
“Any company that is successful in bringing forward capable artificial intelligence at a lower cost - that’s going to have an effect on these big mega cap tech stocks.”
At 11:32 a.m. ET, the Dow Jones Industrial Average rose 366.96 points, or 0.84%, to 43,800.08, the S&P 500 gained 3.35 points, or 0.06%, to 5,959.41 and the Nasdaq Composite lost 96.21 points, or 0.50%, to 18,977.49.
Investors rotated to other areas of the market. Energy stocks gained 1%, tracking a 2% jump in crude prices after US President Donald Trump canceled oil major Chevron’s Venezuela license.
Gains among financials stocks such as Travelers and Visa aided the blue-chip Dow’s rise.
Dampening some risk-taking, data showed jobless claims jumped more than expected in the previous week, while another report reiterated that economic growth slowed in the fourth quarter.
Thursday’s data comes on the heels of multiple reports over the past week that suggested the economy was stalling, fears of which have also put all three major US indexes on track for monthly declines.
On the trade front, US President Donald Trump floated a 25% “reciprocal” tariff on European cars and other goods. He also said the proposed tariffs on Mexico and Canada will go into effect on March 4 as scheduled.
Focus will now shift to the monthly Personal Consumption Expenditure data, the Federal Reserve’s preferred inflation gauge, due on Friday.
Traders expect the Fed to lower borrowing costs by at least 50 basis points by December, according to data compiled by LSEG.
Salesforce forecast fiscal 2026 revenue below expectations, sending shares of the business software provider down 1.4%.
Snowflake rose 10% after the data analytics provider forecast fiscal 2026 product revenue above estimates.
Viatris slumped 16.3% after the drugmaker forecast downbeat annual results, while Warner Bros Discovery jumped 5.1% after saying it expects streaming profits to double this year.
Declining issues outnumbered advancers by a 1.09-to-1 ratio on the NYSE and by a 1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 17 new 52-week highs and five new lows while the Nasdaq Composite recorded 30 new highs and 155 new lows.
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