Wall Street closes in the red
After the Nvidia euphoria, disillusionment sets in
08/24/2023 10:46 p.m
Predominantly positive economic data from the US economy are causing disillusionment on Wall Street. The euphoria about Nvidia’s business figures from the previous day does not last either. The Dow closes sharply.
The US stock exchanges closed weakly at the daily low in the evening. Another strong business report from the chip company Nvidia gave the technology-heavy Nasdaq stock market only a short-term boost. The plus quickly crumbled off again. It was a similar story on Wall Street, with early gains after a slow start not proving to be sustainable. In detail, robust economic data aroused new interest rate concerns.
The Dow Jones Industrial ultimately lost 1.08 percent to 34,099.42 points, ending the day at its lowest level since mid-July. In addition, an important medium-term trend line was broken, the sliding 90-day line, which is often observed by those interested in chart technology. For the market-wide S&P 500 it went down by 1.35 percent to 4376.31 points. The Nasdaq 100 lost 2.19 percent to 14,816.44 points.
US job market surprisingly robust
The economic data from the world’s largest economy should – like the previous ones – contribute to “that the interest rate expectations regarding the US central bank do not disappear completely,” commented analyst Ralf Runde from Helaba.
In the US, the number of weekly initial jobless claims had fallen again and surprisingly. This should be seen as another indication of the resilience of the US labor market and raise concerns about inflation developments, as a tight labor market is usually associated with rising wages. In addition, orders for durable goods in July, excluding transport goods such as aircraft, rose more sharply than expected month-on-month. “The US order intake is convincing in detail”, commented Ralfcircul.
Nvidia: Investors are betting on falling prices
The topic of conversation on the market was Nvidia. The semiconductor and graphics card group had set an exclamation mark with its business figures and once again exceeded the already very high expectations. In the end, however, the share only rose by a meager 0.1 percent, and significantly higher premiums could not be maintained.
After the initial euphoria about Nvidia’s extremely strong business figures, disillusionment has now set in in the semiconductor sector. The very high expectations of the Nvidia business figures would have caused a high degree of disappointment potential, so that many investors would have bet on falling prices. After the short positions had been covered, the follow-up purchases were missing, it said in the trade. Stocks related to AI fell significantly. Palantir Technologies slipped 7.6 percent and Advanced Micro Devices 7.0 percent. The papers from OpenAI investor Microsoft lost 2.1 percent.
Investors are now turning their focus to the central bankers’ meeting in Jackson Hole. On Friday, US Federal Reserve Chairman Jerome Powell will deliver an eagerly awaited speech, which the market hopes will provide clues about the Fed’s further interest rate course.