Stock market today: Nasdaq clinches record close, JPMorgan drags down Dow
Is the Nasdaq Surge Sustainable Amid Dow Dip?
The Nasdaq Composite achieved a record close, driven by gains in Nvidia shares ahead of its upcoming earnings report. Meanwhile, the Dow Jones Industrial Average fell below 40,000, impacted by a decline in JPMorgan shares after CEO Jamie Dimon hinted at an earlier retirement than expected.
Investor focus is on Nvidia, with high expectations for its earnings, seen as a potential catalyst for further market gains. Additionally, rising commodity prices, particularly copper and gold, are stoking inflation concerns. The market is also awaiting the Federal Reserve's meeting minutes for further direction on monetary policy.
What specific factors contributed to the Nasdaq Composite reaching a record close on Monday?
The Nasdaq Composite reached a record close on Monday primarily due to significant gains in shares of Nvidia ahead of the chipmaker's highly anticipated earnings release later in the week35. Nvidia's performance was a key driver, with expectations for substantial growth in earnings and revenue, specifically projected increases of 400% and 240%, respectively3. This optimism about Nvidia's financial outcomes likely fueled investor enthusiasm, contributing to the broader index's rise.
Additionally, other factors supporting the Nasdaq's climb included general advances in the technology sector and positive movements in other major stocks within the index. For example, Microsoft announced a new category of PCs called Copilot+ PCs, which are equipped with AI PC chips, further boosting sentiment around tech stocks3. The overall market environment, characterized by anticipation around corporate earnings and technological advancements, played a crucial role in pushing the Nasdaq to a record close.
What are the market expectations for Nvidia's earnings in terms of growth percentages for revenue and earnings?
The market expectations for Nvidia's earnings are quite high, with analysts projecting significant growth for both revenue and earnings. For the quarter ended April 2024, analysts expect Nvidia to deliver a year-over-year increase in earnings on higher revenues. The consensus estimates for the quarter are as follows:
- Revenue: Expected to be $24.27 billion, up 237.5% from the year-ago quarter.
- Earnings per share (EPS): Expected to be $5.52 per share, representing a year-over-year change of +406.4%.
These estimates reflect the strong demand for Nvidia's graphics chips for gaming and artificial intelligence, as well as the company's dominant position in the AI hardware and software market5. The upcoming earnings report will show whether Nvidia can meet or exceed these high expectations.