Nasdaq 100 futures fall slightly after chip giant Nvidia delivers light guidance

Finance

A trader works at the New York Stock Exchange NYSE in New York, the United States, May 18, 2022.
Michael Nagle | Xinhua News Agency | Getty Images

Stock futures were mixed on Wednesday evening as investors digested a disappointing update from Nvidia, an economic bellwether in the technology industry.

Stock futures tied to the Dow Jones Industrial Average rose 21 points, or less than 0.1%. Those for the S&P 500 slipped les than 0.1%, while Nasdaq 100 futures shed 0.3%%.

The move in futures comes after some disappointing quarterly reports from the technology sector. Shares of chipmaker Nvidia dropped more than 6% in extended trading after the company delivered weaker-than-expected guidance for the second quarter. The company’s CFO said Nvidia would slow hiring.

Similarly, software stock Snowflake tumbled nearly 14% after the company’s guidance for operating margin came in narrower than expected.

Though first-quarter earnings for the market as a whole have been largely in line with historical trends, there have been dramatic pullbacks for some major stocks after earnings reports as investors look for the impact of inflation and slowing economic growth.

“If there’s any reason to sell, they’re embracing it,” said Jeremy Gonsalves, national director of portfolio management at BNY Mellon Wealth Management.

Stocks rose during Wednesday’s regular market hours, with the Nasdaq gaining 1.5% to lead the way. The S&P 500 added 0.9%, while the Dow gained 0.6%.

All three indexes are positive for the week, putting them on track to snap long losing streaks. The Dow fell for eight consecutive weeks, while the S&P 500 and the Nasdaq have each slipped for seven straight weeks.

One bright spot for investors in the earnings front was in retail with Williams-Sonoma, which jumped 6% in extended trading after beating estimates on the top and bottom lines. Macy’s, Dollar Tree and Dollar General are among the companies that report results before the bell on Thursday.

Also on Thursday, investors will get an updated look at weekly jobless claims and a second read on first-quarter GDP. Data on pending home sales will follow later in the morning.

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