(Sharecast News) – US stocks were mostly higher in early trade on Thursday after better-than-expected second-quarter results from chip designer Nvidia, although gains were muted.
At 1510 BST, the Dow Jones Industrial Average was up 0.3%, while the S&P 500 was 0.2% firmer and the Nasdaq was flat.
Nvidia shares were 3.5% higher, after the group posted an 88% quarter-on-quarter jump in revenue to $13.5bn last night, compared with the $11.2bn consensus forecast. Earnings per share shot up 148% to $2.70, beating the $2.09 forecast.
Meanwhile, the company said it expects to make $16bn in the third quarter, some $3.4bn ahead of analysts’ current expectations. It also added $25bn to its stock buyback programme.
Joshua Mahony, chief market analyst at Scope Markets, said: “Nvidia has lived up to its billing as the AI darling, with the company smashing past expectations to keep the gravy train going for now.
“Gains seen throughout the tech sector off the back of potential AI revenues are maintained, with investors hoping that where Nvidia earnings go, others will follow.”
On the macro front, data released by the Labor Department showed that the number of Americans filing for unemployment benefits fell last week to its lowest level in three weeks.
Initial jobless claims fell by 10,000 to 230,000 from the previous week’s level, which was revised up by 1,000 to 240,000. Analysts were expecting a level of 240,000.
Meanwhile, the four-week moving average came in at 236,750, up 2,250 on the previous week’s average, which was revised up by 250.
The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “These data suggest claims will be steady at their current level for the next few months, which means that any further softening in payroll growth will have to come via slower gross hiring. In recent months, the NFIB hiring intentions index also has been broadly flat, net, so a first approximation of payrolls for the next couple months, at least, is little change from the recent trend, close to 200k.”
Investors were also eyeing the start of the Jackson Hole symposium, as Federal Reserve members gather in Wyoming for their annual conference that lasts until Saturday.
The market will be on the lookout for any comments regarding the near-term outlook for economic growth and inflation, and its impact on monetary policy over the coming months.
