Wednesday Market News: Nasdaq Composite Flat, Russell 2000 Soars (JPM, ASML, NVDA)
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NVIDIA Surging in Late Trading
Shares of NVIDIA are surging in late trading, now up 3.60%. The company has recaptured most its losses from yesterday after it declined sharply following the release of ASML’s earnings.
We detailed this morning (see underneath market updates) why ASML’s earnings likely didn’t give much insight into overall AI demand.
Other winners today include United Airlines, which is now up 14% after earnings. Banking stocks are generally doing well after Morgan Stanley beat earnings this morning, and Walgreens Boots Alliance is having another strong day after announcing plans to streamline costs yesterday.
Stocks Rising Today
With small cap stocks leading the market today, here are some of the more notable performers:
- Wolfspeed (Nasdaq: WOLF): Up 17% after strong gains yesterday on news the company would receive $750 million in government grants for a silicon carbide wafer manufacturing plant built in North Carolina.
- Trump Media & Technology (NYSE: DJT): Rose 11% as betting markets continue shifting toward a Donald Trump victory. Crypto prediction market Polymarket now has Donald Trump favored at 59.5% odds to win the election. Professional forecasters like Nate Silver have the probability of Trump winning at closer to 50%.
- Evgo (Nasdaq: EVGO): The heavily-shorted EV stocks is up amid a broader small cap rally. Many heavily-shorted stocks are seeing strong outperformance today.
Small Caps Up Big Again
After a winning day yesterday, small caps are once again leading the market today. The Russell 2000 is up 1.53% shortly after noon ET while the Nasdaq is down .09% and the S&P 500 is up .14%.
Both United Airlines (NYSE: AU) and Morgan Stanley (NYSE: MS) are up big after beating earnings. Another post-earnings winner is mega-REIT Prologis (NYSE: PLD), which continues climbing higher and is now up 4.5%.
Losers today include Synopsys (Nasdaq: SNPS), Cadence (Nasdaq: CDNS), and Applied Materials (Nasdaq: AMAT). All of these stocks are likely still feeling the impacts from ASML‘s earnings report which tempered expectations on semiconductor spending outside AI.
Amazon The Latest Magnificent 7 Stock to Ink Nuclear Deal
Today, Amazon (Nasdaq: AMZN) announced that it had signed an agreement with Dominion Energy to develop a small modular nuclear reactor in Northern Virginia.
Amazon’s HQ2 is located in Northern Virginia and the area also has the densest concentration of data centers in the United States. Large cloud companies signing agreements for nuclear power is a sign how ambitious their spending around large AI data centers could get in the years to come.
As of 8 a.m. ET, indexes are slightly in the green in premarket trading.
- Nasdaq Futures: Up .14%
- S&P 500 Futures: Up .06%
- Dow Jones Futures: Up .03%
Yet, with earnings season continuing and the fallout from ASML‘s (Nasdaq: ASML) earnings impacting tech stocks, there’s a good chance today could see more movement once trading begins at 9:30 a.m. ET. Let’s look at a few of today’s top stories.
Earnings On Wednesday Morning
Major earnings before market open today include:
- Prologis
- Abbott Laboratories
- Morgan Stanley
ASML was also supposed to report earnings today, but accidentally issued them yesterday (more on that in a bit). JPMorgan (NYSE: JPM) topped estimates this morning with profits rising 32% from last year. Both profit and sales numbers came in significantly ahead of Wall Street estimates.
Yet, so far, Wall Street’s reactions to JPMorgan’s earnings have been muted. Its stock is up just .50% in premarket trading. It could be a very positive earnings season for the banking industry as Bank of America (NYSE: BAC) also topped estimates on Tuesday.
ASML Continues to Fall
ASML – which is headquartered in the Netherlands – continues to fall in European trading today. Its Nasdaq-listed shares are down 3.48% in premarket trading.
The company manufactures the most advanced components in creating semiconductors. So, its results initially led to a broad sell-off across semiconductor stocks as a supplier of ASML’s importance could point to weakness in important growth market like AI. Yet, ASML’s CEO was quick to note on their earnings call that AI growth isn’t the problem that led the company to issue weaker guidance for next year. He said:
“Very clearly, the strong performance of AI clearly continues and I think it continues to come with quite some upside, but … in other market segments, it takes longer to recover. Recovery is there, but it’s more gradual than what we anticipated before and it will continue in 2025.”
The majority of ASML’s business comes from chip markets unrelated to the growth of AI. In addition, the company is in the crosshairs of geopolitical tensions as sales of its most advanced systems have been restricted to China.
Other semiconductor stocks like NVIDIA (Nasdaq: NVDA) and Taiwan Semiconductor (NYSE: TSM) are up in premarket trading. This illustrates that ASML’s results don’t appear to be a ‘contagion’ spreading across companies boosted by spending on AI. It is likely ASML’s results will lead to another decline in its share price today, but won’t be the catalyst for driving the entire Nasdaq Composite down for a second day in a row.
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
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