Financial markets exhibit intense opposition towards Nvidia's reported figures.
Investors are keeping their cards close to their chest, waiting on the outcome of Nvidia's earnings. These numbers are predicted to shed light on the future of the AI sector. On the other hand, a stalled bidding war is affecting the stock value of production company Paramount.
The US market has seen a positive shift as of late. The Dow Jones Industrial Average remained constant at 41,251 points. The S&P 500 index climbed 0.2%, reaching 5,629 points. The Nasdaq Composite also increased by 0.2%, touching 17,767 points. The Consumer Confidence Index in the US saw an improvement, rising to 103.3 in August from a revised 101.9 in July. Economists had anticipated a reading of 100.7.
As we look ahead to the next 12 months, consumer inflation expectations have hit their lowest point since March 2020. Along with this, there's a growing pessimism surrounding the job market. "This report suggests a potential rate cut by the Federal Reserve, but it's not indicative of a recession at this moment," stated Conrad DeQuadros, an economist at Brean Capital.
Eyes on Nvidia
The market is currently preoccupied with Nvidia's earnings, which will be unveiled on Wednesday. Paul Nolte, an economist and strategist at Murphy & Sylvest, explained, "Nvidia's profits are the primary source of concern in the market right now. The company, renowned for its AI chips, will provide insights into the industry's vitality." While Nvidia's stock has served as the engine behind tech sector growth this year, apprehension has risen due to increasing costs in the booming technology sector.
Oil prices, meanwhile, have seen a significant drop following a recent surge: Brent crude dropped by approximately 2% to $79.83 per barrel, while US West Texas Intermediate fell by around 2% to $75.76 per barrel. Tensions in the Middle East and worries about a potential Libyan oil field shutdown caused oil prices to skyrocket by more than 7% over the past three trading days.
Paramount's Bidding War Fizzles
The collapse of a bidding war is causing trouble for Paramount's stock, which dropped by 5.6%. Media magnate Edgar Bronfman Jr. called off his pursuit of Paramount, paving the way for US film producer David Ellison to take control. Additionally, a damning analyst report impacted Hershey's stock, causing it to decrease by nearly 2.5% to $191.90. Citigroup analysts downgraded Hershey's stock to "sell" from "neutral" and lowered their price target to $182 from $195, attributing the move to weaker margins resulting from higher cocoa prices and a slowdown in demand in North America.
On a positive note, Chinese e-commerce giant JD.com, listed in the US, saw its shares increase by nearly 3% after announcing plans to buy back $5 billion worth of its own shares over the next 36 months.
The uncertainty surrounding Nvidia's earnings is not only affecting the tech sector but also the broader United States of America market, as investors are closely watching the company's performance due to its significant role in the AI industry. The stalled bidding war for Paramount has negatively impacted its stock price, causing concern among investors in the United States of America.
