Nvidia boosts tech stocks but caution dominates ahead of Fed speech

Nvidia boosts tech stocks but caution dominates ahead of Fed speech NEW YORK: Blockbuster earnings from AI chip behemoth Nvidia boosted technology stocks Thursday (Aug 27), but broader market movements were lackluster as investors awaited a key speech by the US Federal Reserve chairman on the prospects for the world's biggest economy. While inflation and rising government bond yields worldwide have tempered the euphoria surrounding the artificial intelligence boom in recent sessions, Nvidia's blowout results lifted shares of the chipmaker by nearly nine per cent. Strong results from fellow tech titan Salesforce also gave markets a lift. "The broader takeaway for AI remains highly constructive," said a note from LPL Financial's Adam Turnquist. "Nvidia's results imply the AI capital expenditure cycle is not slowing but, in Huang's words, continues at 'full steam.'" In its highly anticipated report, Nvidia - the world's biggest company by market value - shattered analyst forecasts by unveiling revenues that more than doubled in the second quarter from the year earlier, to a whopping $96 billion. Nvidia's rise helped lift all three major US equity indices, led by the tech-centred Nasdaq, which piled on 1.6 per cent. But the gains were not broad-based across the stock market. Out of 11 industrial sectors in the S&P 500, only technology advanced. The biggest losing sector was consumer discretionary, with industrials and real estate also decisively lower. Markets are looking ahead to Friday's address by Fed chief Kevin Warsh at a key central bankers' conference in Jackson Hole, Wyoming. Warsh's last major public appearance at a late July Fed meeting was widely panned as giving an ambiguous message on countering inflation. "I think investors have been frustrated thus far with the new chair of the Fed for lack of clarity as to what it would take for them to change rates and fight inflation, which currently is well above their target," said Art Hogan of B. Riley Wealth. Oil prices rebounded after declines over several sessions as investors await developments on diplomatic efforts to reopen the Strait of Hormuz to tanker and cargo traffic. US officials have vowed further economic pressure to make Iran open the strait after six months of war, which has sent energy prices soaring. However, "shipping data continues to show traffic through the Strait running at a fraction of pre-war levels," said David Morrison, senior market analyst at Trade Nation. On the corporate front, French drinks heavyweight Pernod Ricard saw its stock drop 4.4 per cent after posting a 26 per cent slump in annual profits due to lower sales in the United States and China. But Salesforce soared more than 22 per cent after the software giant reported better than expected results, citing "incredible demand" for AI and data products. [Image text:] NVIDIA 2788-2888SAN T0MAS