US close: Wall Street ends higher despite Nvidia data centre miss, Fed turmoil

(Sharecast News) - Major indices closed higher on Thursday, as investors weighed Nvidia's latest quarterly update and its implications for the broader artificial intelligence trade.

At the close, the Dow Jones Industrial Average was up 0.16% at 45,636.90, while the S&P 500 advanced 0.32% to 6,501.86 and the Nasdaq Composite saw out the session 0.53% firmer at 21,705.16.

The Dow closed 71.67 points lower on Thursday, taking a bite out of gains recorded in the previous session despite nervousness ahead of Nvidia's second-quarter earnings and uncertainty surrounding the future of the Federal Reserve.

Nvidia's Q2 earnings beat Wall Street expectations, with revenue rising 56% year-on-year to $46.7bn and net income surging 59% to $26.4bn, driven by continued strength in AI infrastructure demand, particularly for its Blackwell GPU architecture, which saw a 17% sequential increase in data centre revenue. However, total data centre sales of $41.1bn fell short of analyst projections, reflecting the lingering impact of export restrictions to China and inventory adjustments. Despite the earnings beat, Nvidia shares dipped around 3% in after-hours trading, as investors reacted to the modest shortfall in data centre performance and tempered forward guidance.

Also rumbling on in the background were ongoing concerns that the Fed could be opened up to direct political manipulation after Donald Trump told governor Lisa Cook that she was fired earlier this week, a move that Cook plans to challenge in the courts. Trump's top economic adviser, Kevin Hassett, told Cook that she should go on leave from the central bank even with her plans to file a lawsuit. Cook's departure would increase the influence of the president's appointees on the board.

On the macro front, the US economy grew more than initially estimated in the second quarter, according to figures released on Thursday by the Commerce Department. A second estimate revealed that gross domestic product expanded at an annualised rate of 3.3%, up from an initial estimate of 3% growth. This followed a 0.5% contraction in the first three months of the year. The Commerce Department said the revision to Q2 GDP mainly reflected upward revisions to investment and consumer spending that were partly offset by a downward revision to government spending and an upward revision to imports.

Elsewhere, Americans lined up for unemployment benefits at a decelerated pace last week, according to fresh data from the Department of Labor, though underlying trends suggest the US labour market remains in a holding pattern. Initial jobless claims fell by 5,000 to a seasonally adjusted 229,000 in the week ended 23 August, slightly below consensus forecasts of 230,000, while continuing claims, which track those still receiving benefits, dipped by 7,000 to 1.954m in the prior week. The four-week moving average, which aims to strip out week-to-week volatility, increased to 221,750, up 4,500 from the previous print, reflecting a gradual uptick in claims over the past month.

On another note, US pending home sales fell by 0.4% month-on-month in July, according to the National Association of Realtors, extending the 0.8% drop in the previous month to mark the first back-to-back contraction since January. NAR Chief Economist Lawrence Yun said: "Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant. Buying a home is often the most expensive purchase people will make in their lives. This means that going under contract is not a decision homebuyers make quickly. Instead, people take their time to ensure the timing and home are right for them."

Finally, the Kansas Federal Reserve's manufacturing index came to 0 in August, improving from July's reading of -3, reflecting mostly unchanged overall manufacturing activity. Looking ahead, the future composite index rose from 8 to 11, reflecting cautiously positive expectations for production, orders, and shipments.

In the corporate space, Best Buy reported an unexpected rise in Q2 sales on Thursday, underpinned by a robust online performance and heightened demand for AI-enabled devices, but shares in the US electronics retailer slipped in pre-market trading after it opted to leave FY sales and profit guidance unchanged, while Dick's Sporting Goods beat Wall Street expectations on both the top and bottom lines and raised its FY sales and earnings guidance as it saw growth in both average tickets and transactions.

After the close, Dell reported record revenues driven by the AI server boom, leading it to raise FY guidance, while chipmaker Marvell delivered strong Q2 revenue growth, driven primarily by its data centre segment.

Reporting by Iain Gilbert at Sharecast.com

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Salesforce.Com Inc. (CRM) $254.53 4.43%

American Express Co. (AXP) $326.99 1.99%

Cisco Systems Inc. (CSCO) $69.43 1.45%

International Business Machines Corporation (CDI) (IBM) $245.73 1.28%

Chevron Corp. (CVX) $159.32 1.25%

Apple Inc. (AAPL) $232.56 0.90%

Caterpillar Inc. (CAT) $434.91 0.85%

JP Morgan Chase & Co. (JPM) $301.07 0.84%

3M Co. (MMM) $157.56 0.63%

Unitedhealth Group Inc. (UNH) $302.29 0.62%

Dow Jones - Fallers

Merck & Co. Inc. (MRK) $83.21 -2.09%

Nike Inc. (NKE) $77.92 -0.93%

Amgen Inc. (AMGN) $285.61 -0.82%

Dow Chemical Co. (DOW) $24.57 -0.69%

Johnson & Johnson (JNJ) $175.45 -0.59%

Coca-Cola Co. (KO) $68.36 -0.54%

Visa Inc. (V) $349.86 -0.38%

McDonald's Corp. (MCD) $312.22 -0.23%

Travelers Company Inc. (TRV) $270.28 -0.23%

Procter & Gamble Co. (PG) $155.65 -0.21%

S&P 500 - Risers

Kohls Corp. (KSS) $15.37 17.87%

Coty Inc. Class A (COTY) $4.33 17.34%

CenturyLink Inc. (LUMN) $5.02 7.04%

Helmerich & Payne Inc. (HP) $20.22 6.70%

Agilent Technologies Inc. (A) $124.96 5.63%

HP Inc (HPQ) $28.35 4.96%

Alaska Air Group Inc. (ALK) $63.18 4.74%

NetApp Inc. (NTAP) $117.22 4.54%

Bread Financial Holdings, Inc. (BFH) $66.69 4.43%

Salesforce.Com Inc. (CRM) $254.53 4.43%

S&P 500 - Fallers

Hormel Foods Corp. (HRL) $25.22 -12.31%

Bath & Body Works, Inc. (BBWI) $29.36 -6.35%

Foot Locker Inc. (FL) $25.06 -5.40%

NextEra Energy Inc. (NEE) $72.09 -3.67%

Crown Castle International (CCI) $97.74 -3.60%

J. M. Smucker Co. (SJM) $106.72 -3.49%

Resmed Inc. (RMD) $275.38 -3.43%

Brown Forman Corp. Class B (BF.B) $28.97 -2.95%

Biogen Inc (BIIB) $132.65 -2.72%

American Tower Corp (Reit) (AMT) $202.56 -2.36%

Nasdaq 100 - Risers

Trip.com Group Limited (TCOM) $75.03 14.92%

Qvc Group Inc Series A (QVCGA) $7.11 13.22%

Micron Technology Inc. (MU) $122.00 3.61%

Seagate Technology Plc (STX) $172.33 3.04%

Wynn Resorts Ltd. (WYNN) $126.74 2.87%

Broadcom Inc. (AVGO) $308.65 2.80%

Mercadolibre Inc. (MELI) $2,472.29 2.44%

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Alphabet Inc. Class A (GOOGL) $211.64 2.01%

Alphabet Inc. Class C (GOOG) $212.37 2.00%

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Biogen Inc (BIIB) $132.65 -2.72%

Cintas Corp. (CTAS) $208.32 -2.29%

Microchip Technology Inc. (MCHP) $65.25 -2.10%

Charter Communications Inc. (CHTR) $263.63 -2.05%

Biomarin Pharmaceutical Inc. (BMRN) $57.71 -1.62%

Gen Digital Inc. (GEN) $30.28 -1.50%

Skyworks Solutions Inc. (SWKS) $75.11 -1.43%

JD.com, Inc. (JD) $30.39 -1.40%

Incyte Corp. (INCY) $83.70 -1.34%

Regeneron Pharmaceuticals Inc. (REGN) $579.61 -1.25%