* Major stock indices rallied at the close, with the Nasdaq and Dow Jones up over 0.1%;
* Long-term U.S. Treasury yields rose, with the 2-year note climbing to 4.65%;
* Walgreens fell 2.5%, as its status as a Dow component stock will be replaced by Amazon.
On Wednesday, U.S. stocks experienced mixed movements as investors digested the latest Federal Reserve meeting minutes and awaited Nvidia's latest earnings report. By the close, the Dow Jones Industrial Average rose by 48.44 points, or 0.13%, to 38,612.24, the Nasdaq Composite fell by 0.32% to 15,580.87, marking a third consecutive day of decline, and the S&P 500 increased by 0.13% to 4,981.80.
Nvidia's Earnings Release
The chip giant Nvidia announced its latest earnings after the market closed, with its shares surging by 10% at one point in after-hours trading. Benefiting from the market's spending on artificial intelligence hardware, the demand for the company's data center chips and graphics processing units (GPUs) continues to grow significantly. Nvidia reported revenue of $22.1 billion for the last quarter, up from $6.05 billion a year ago and above the market expectation of $20.4 billion. Net profit was $12.3 billion, with adjusted earnings per share (EPS) at $5.16, exceeding the market expectation of $4.59.
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Notably, data center revenue soared by over 400% year-over-year, reaching $18.4 billion, which was above the market expectation of $17.06 billion. Gaming revenue grew by 56% year-over-year, with total revenue at $2.9 billion. Professional visualization business revenue was $463 million, up 105%, and automotive business revenue was $281 million, down 4%.
The company expects to maintain strong revenue growth in the current fiscal quarter, forecasting it to reach $24 billion, compared to $7.2 billion in the same period last year, while the market expectation is $22.2 billion. The adjusted gross margin for the first quarter is expected to be 77%, above the market expectation of 75.6%.
In a press release, Nvidia's CEO, Jen-Hsun Huang, stated: "Accelerated computing and generative AI have reached a tipping point. Demand from companies, industries, and countries around the world is surging."
Many institutions believe that considering the main supplier TSMC's packaging capacity is expected to improve further in the first half of this year, this will help Nvidia to break through core production bottlenecks and deliver more chips to customers.Market Overview
The latest 20-year U.S. Treasury bond auction, which encountered a cold response, has triggered a sell-off of medium to long-term U.S. Treasuries among investors. The 2-year U.S. Treasury, closely linked to interest rate expectations, rose to 4.65%, and the benchmark 10-year U.S. Treasury closed above 4.32%.
The minutes from the Federal Reserve's January meeting revealed that most policymakers are concerned about the risks of lowering interest rates too soon, and there is widespread uncertainty about how long rates should remain at their current levels.
Richmond Federal Reserve Chairman Thomas Barkin stated on Wednesday that the January inflation data—increases in consumer and wholesale prices that were faster than expected—complicates the central bank's upcoming interest rate decisions. "This certainly doesn't make things easier; you do worry that when the disinflationary cycle in goods prices ends, you will get higher prices for housing and services."
Federal funds rate futures indicate that traders are sticking to their bets that the Federal Reserve will start cutting interest rates as early as June.
On the individual stock front, Palo Alto Networks plummeted nearly a quarter after the cybersecurity company forecast third-quarter revenue below Wall Street expectations, indicating cautious corporate spending.
Walgreens fell 2.5%, as the U.S. pharmacy chain operator's position in the Dow Jones index will be replaced by Amazon next week, which rose 0.9%.
Google rose 1.2%, as the company released an artificial intelligence model, GEMMA, for open-source developers.
Ford Motor Company fell 0.9%, as the company reduced the price of its Mustang Mach-E electric SUV in the U.S. market to counter a significant drop in sales that began in January.
International oil prices rose to a three-month high, with investors weighing developments in the Middle East. The near-month contract for West Texas Intermediate (WTI) crude oil increased by 1.13%, to $77.91 per barrel, and the near-month contract for Brent crude oil rose by 0.84%, to $83.03 per barrel.Gold experienced a narrow trading range, with the COMEX gold futures for delivery in February on the New York Commodity Exchange closing down by 0.26%, at $2,022.30 per ounce.
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