Market Overview
The stock market remained relatively unchanged from yesterday's close. The S&P 500 found support on an early test of its 50-day moving average (5,506), dropping below that level in the afternoon but ultimately settling above the key short-term support level. Market breadth showed a lack of conviction on either side, resulting in lackluster action and choppy movement in some mega cap names.
Stock Performance
NVIDIA (NVDA, Financial) shares were volatile today in response to a report, which the company then denied, that it received a DOJ subpoena.Economic Data
The market was digesting the JOLTS report, which showed that job openings fell to 7.673 million from 7.910 million in July, reaching their lowest level since early 2021. Tomorrow's calendar features data on the labor market, including weekly jobless claims and the ADP Employment Change for August.Treasury Yields
Treasury yields declined, with the 2-year note yield down 12 basis points to 3.77% and the 10-year note yield also settling at 3.77%, down eight basis points from yesterday. This did not stir selling in equities, as weakness in the labor market is expected to drive the Fed to cut rates by 50 basis points this month. The fed funds futures market now sees a 45.0% probability of a 50 basis points rate cut at the September 17-18 FOMC meeting, up from 38.0% yesterday, according to the CME FedWatch Tool.Sector Performance
- Real Estate: +0.3% - Utilities: +0.9% - Energy: -1.4%Energy was the only sector down more than 0.5% after oil prices dropped below $70.00/bbl. WTI crude oil futures settled 1.8% lower at $69.13/bbl, reflecting lingering concerns about growth prospects impacting demand.Year-to-Date Performance
- S&P 500: +15.7% - Nasdaq Composite: +13.8% - Dow Jones Industrial Average: +8.7% - S&P Midcap 400: +8.0% - Russell 2000: +5.8%Today's Economic Data
- Weekly MBA Mortgage Applications Index: 1.6%; Prior: 0.5% - July Trade Balance: -$78.8 billion (consensus: -$78.5 billion); Prior revised to -$73.0 billion from -$73.1 billion - Key takeaway: Uptick in imports, which will act as a drag on Q3 GDP forecasts but is a reassuring demand signal for the U.S. economy. - July Factory Orders: 5.0% (consensus: 4.5%); Prior: -3.3% - Key takeaway: Business spending languished in July. - July JOLTS - Job Openings: 7.673 million; Prior revised to 7.910 million from 8.184 millionThursday's Economic Lineup
- 8:15 ET: August ADP Employment Change (consensus: 150,000; prior: 122,000) - 8:30 ET: Weekly Initial Claims (consensus: 236,000; prior: 231,000), Continuing Claims (prior: 1.868 million), revised Q2 Productivity (consensus: 2.3%; prior: 2.3%), and revised Q2 Unit Labor Costs (consensus: 0.9%; prior: 0.9%) - 9:45 ET: Final August S&P Global U.S. Services PMI (prior: 55.0) - 10:00 ET: August ISM Non-Manufacturing (consensus: 51.0%; prior: 51.4%) - 10:30 ET: Weekly natural gas inventories (prior: +35 bcf) - 11:00 ET: Weekly crude oil inventories (prior: -0.85 million)Overseas Markets
- Europe: DAX -0.8%, FTSE -0.4%, CAC -1.0% - Asia: Nikkei -4.4%, Hang Seng -1.1%, Shanghai -0.7%Commodities
- Crude Oil: -1.24 @ 69.13 - Nat Gas: -0.06 @ 2.14 - Gold: +3.20 @ 2525.40 - Silver: +0.15 @ 28.54 - Copper: -0.02 @ 4.07NVDA
Today's News
C3.ai (AI, Financial) shares plunged nearly 15% after the enterprise software maker provided disappointing guidance for the upcoming quarter. The company reported a loss of $0.05 per share, with revenue rising 20.5% to $87.2M, but subscription revenue came in below estimates at $73.5M. C3.ai's fiscal second-quarter sales forecast of $88.6M to $93.6M also fell short of expectations, leading to the sharp decline in stock price.
Nvidia (NVDA, Financial) clarified that it did not receive a subpoena from the Department of Justice regarding an antitrust probe, despite reports suggesting otherwise. The company emphasized its competitive practices and willingness to cooperate with regulators. Nvidia shares fell around 1% following the news. Nvidia continues to dominate the AI accelerator market, holding approximately 80% share.
U.S. Steel (X, Financial) saw its stock plummet 18% on reports that President Joe Biden is preparing to block Nippon Steel's acquisition of the company. The administration has deemed the $14 billion deal a national security risk, a decision expected to be finalized soon. This move follows evaluations by the Committee on Foreign Investment in the U.S., which raised concerns that could not be mitigated.
HP Enterprise (HPE, Financial) shares fell 2.6% after reporting fiscal third-quarter results that surpassed expectations. The company now forecasts adjusted earnings for the fiscal year to be between $1.92 and $1.97 per share, up from a prior view of $1.85 to $1.95 per share. Revenue for the quarter rose 10.1% year-over-year to $7.71B, driven by a 35% increase in server segment revenue.
Frontier Communications (FYBR, Financial) soared 38% following a report that Verizon (VZ, Financial) is in advanced talks to acquire the company. Verizon shares fell 4% on the news. The potential all-cash deal could be announced imminently, with Frontier boasting a market cap of about $7 billion and significant debt.
Nvidia (NVDA, Financial) stock has been on a downward trend, losing 9.5% on Tuesday, which wiped out $279B in value. Deutsche Bank analyst Jim Reid noted that Nvidia has experienced some of the largest market declines and increases in history. The recent downturn follows a fiscal second-quarter report that, despite doubling revenue year-over-year, failed to meet the highest market expectations.
ChargePoint Holdings (CHPT, Financial) reported a Q2 GAAP EPS of -$0.16, in line with expectations, but revenue of $109M missed estimates by $4.48M. The company continues to face challenges in the electric vehicle charging sector, with persistent struggles affecting its financial performance.
AeroVironment (AVAV, Financial) posted strong Q1 results with a non-GAAP EPS of $0.89, beating estimates by $0.24, and revenue of $189.5M, up 24.4% year-over-year. The company maintained its fiscal 2025 revenue guidance of $790M to $820M, despite market expectations of $829.62M.
GitLab (GTLB, Financial) shares surged over 15% after the company reported strong fiscal Q2 results and raised its full-year outlook. GitLab expects adjusted EPS of $0.15 to $0.16 for Q3, surpassing analyst forecasts. The company also increased its full-year revenue guidance, further boosting investor confidence.
Sprinklr (CXM, Financial) shares dropped 7.68% after Q2 results showed a non-GAAP EPS of $0.06, missing expectations by $0.01. However, revenue of $197.21M beat estimates by $2.83M. The company provided guidance for Q3 and the full fiscal year, indicating continued growth but with some caution.
Couchbase (BASE, Financial) reported Q2 non-GAAP EPS of -$0.06, beating estimates by $0.03, with revenue of $51.59M, up 19.6% year-over-year. Despite the positive results, shares fell 7.74% as the company’s guidance for the next quarter and full fiscal year did not meet market expectations.
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