(Reuters) – Nasdaq futures led declines among U.S. stock index futures on Thursday, with Nvidia’s shares falling in premarket trading after investors were unimpressed by the AI leader’s revenue forecast.
At 04:20 a.m. ET, Dow E-minis were down 80 points, or 0.18%, S&P 500 E-minis were down 25.75 points, or 0.43%, and Nasdaq 100 E-minis were down 127.75 points, or 0.62%.
Nvidia beat quarterly profit expectations, but the company projected its slowest revenue growth in seven quarters and its adjusted gross margins shrank, sending its shares down 3.8% in premarket trading.
“At face value, Nvidia has once again generated the kind of growth that most companies will never achieve in their lifespan,” said Dan Coatsworth, investment analyst at AJ Bell.
“What’s troubled investors this time was a quarter-on-quarter decline in gross margins, with guidance for them to fall further in the coming quarter and weaker-than-expected forward guidance for revenue.”
The sentiment spread to other chip stocks, with Broadcom down 1%, Qualcomm losing 1.1% and Advanced Micro Devices off 0.7%.
Growth stocks also dipped. Microsoft was down 0.3%, while Apple and Amazon.com slipped 0.2% each.
Nvidia has led much of the U.S. market rally since mid-2023, on expectations that artificial intelligence integration could boost corporate profits. The stock has risen more than ninefold in the past two years and the company boasts a market value of $3.5 trillion.
Wall Street indexes have retreated from their record highs, with post-election euphoria giving in to caution after President-elect Donald Trump named his cabinet picks, as markets weigh the potential inflationary impact of his policies.
Investors also kept an eye on escalating tensions between Russia and Ukraine, after Russia launched an intercontinental ballistic missile in retaliation against Ukraine’s strike using American and British missiles earlier this week.
On the data front, a weekly report on jobless claims is due at 8.30 a.m. ET, while comments from Federal Reserve officials Beth Hammack, Austan Goolsbee and Vice Chair for Supervision Michael Barr are on tap.
Money market participants are pricing in a higher chance of the Fed lowering interest rates by 25 basis points at its December meeting – about 55.7%, according to the CME Group’s FedWatch.
Alphabet dropped 0.5% after the Justice Department argued to a judge that Google must sell its Chrome browser and take other measures to end its monopoly on online search.
Crypto stocks such as MARA Holdings jumped 9.3%, MicroStrategy soared 8.6% and Coinbase gained 2.9% as bitcoin prices soared to nearly $100,000 for the first time.
Deere, Baidu and PDD Holdings are among companies set to report quarterly earnings before market open.
Snowflake raised its annual product revenue forecast and said it has teamed up with AI firm Anthropic to build up its cloud services, sending the data analytics provider’s shares up 20%.
Palo Alto Networks lost 5.3% after announcing a two-for-one forward stock split after the cybersecurity firm topped quarterly revenue and profit expectations.
(Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai)
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