Stock Market News Today: Markets turn lower amid bout of selling (SP500)

U.S. stocks on Thursday gave up a chunk of their gains amid an afternoon bout of selling, as a post-earnings drop in chip giant Nvidia (NVDA) intensified.

Sentiment had earlier been boosted by data that showed a more robust expansion in the economy in the second quarter than previously estimated.

The tech-heavy Nasdaq Composite (COMP:IND) had reversed course and was last -0.27% to 17,509.23 points. The benchmark S&P 500 (SP500) had also slipped under the flat line, -0.05% at 5,589.66 points. The blue-chip Dow (DJI) was still in the green, +0.56% to 41,322.01 points.

The attention was squarely focused on Nvidia (NVDA) on Wednesday. Its highly anticipated results showed fiscal second quarter revenue more than doubling Y/Y, amid continued demand from data centers for artificial intelligence (AI) chips. Analysts also heaped praise on the performance and said it was evidence that the AI craze was very much real.

However, for market participants now used to blowout results and guidance, Nvidia’s (NVDA) latest outlook failed to meet up to the loftiest of expectations.

Moreover, the company confirmed some production delays to its much-awaited Blackwell line of graphics processing units, though top boss Jensen Huang said samples were currently shipping to partners and production was expected to start in its fiscal fourth quarter. This combination drove Nvidia’s (NVDA) shares down and wiped off some $202B from the firm’s market cap.

“For all the talk about the ‘post-earnings volatility’ in Nvidia today, more than half of the stock’s daily moves this month have been larger than +/-3.4%,” Bespoke Investment Group noted on X (formerly Twitter).

The spotlight on Thursday returned to economic growth, a topic that has been top of investors’ minds since the U.S. nonfarm payrolls report earlier this month sparked recession concerns and led to a 3% rout in the S&P 500 (SP500).

The U.S. Bureau of Economic Analysis earlier in the morning said real gross domestic product (GDP) increased at an annual rate of 3% in Q2, higher than the first estimate of +2.8%. Moreover, the core personal consumption expenditures (PCE) price index – widely seen as the Federal Reserve’s preferred inflation gauge – was revised downward to +2.8%.

“Consumer spending propelled the economy to a 3.0% annualized growth rate in Q2, an upward revision that exceeded expectations. A rebound in profits growth recouped all the prior quarter’s decline and then some to restore profits to a record high,” Wells Fargo’s Tim Quinlan said.

The second estimates for Q2 GDP and core PCE comes just a day ahead of July’s reading on the Fed’s favorite inflation gauge.

“Forecasters who map the CPI & PPI into PCE expect a mild print in July, with a core reading (0.15%) that annualizes around 2%. This would lead to a large drop in the 6-month annual rate since the Jan 0.5% m/m print will fall out. The 12-month rate would hold steady around 2.6%,” the Wall Street Journal‘s Fed watcher Nick Timiraos said on X.

The GDP figures also indicate that the economy remains strong, and keeps the Fed on track to ease monetary policy.

“With this release & Q3 tracking at around 2% the economy is looking in fine shape overall. The Fed should still cut because, as Powell said, the unemployment rate is higher than it should be. But absent an (unlikely) rise in the urate in August no pressing reason for a 50bp cut,” Jason Furman, professor of the practice of economic policy at Harvard, said on X.

Turning to the fixed-income markets, U.S. Treasury yields were higher on Thursday.

See live data on how Treasury yields are doing across the curve on the Seeking Alpha bond page.

Looking at active stocks, Best Buy (BBY) was the top percentage gainer on the S&P 500 (SP500), after the consumer electronics retailer lifted its annual profit guidance.

Conversely, Dollar General (DG) was the top S&P percentage loser, after the discount retailer slashed its full-year same-store sales growth guidance.

More on the markets