During midday trading on Thursday, US equity indexes exhibited mixed performance as investors navigated a rise in jobless claims alongside Nvidia's recent report, which reflected the company’s smallest revenue beat in two years, as well as President Donald Trump's announcement regarding import tariffs on three major trading partners.
The Nasdaq Composite experienced a decrease of 0.4%, settling at 18,996.5, while the S&P 500 managed a slight uptick of 0.1%, reaching 5,962.3, recovering from prior losses. In contrast, the Dow Jones Industrial Average posted a gain of 0.7%, climbing to 43,735.6. Among the sectors, utilities and technology were the largest decliners, whereas financial services and energy showed strong intraday gains. Nvidia's fiscal Q4 results, released overnight, exceeded analyst expectations, but despite this, its shares fell by 2.6% during intraday trading, marking it as the worst performer on the Dow.
Although the company achieved a revenue beat, it was considered modest and did not measure up to the elevated expectations set over the past two years. A Deutsche Bank note commented on this, stating that 'it was the smallest revenue beat in two years, so that was underwhelming for investors used to much bigger upside surprises.' Looking ahead, Nvidia's sales guidance for the upcoming quarter was indicated to be 'a little above the average estimate.' In the realm of economic indicators, the US initial jobless claims increased to 242,000 during the week ending February 22, up from a previously revised figure of 220,000, surpassing forecasts that predicted 221,000 according to Bloomberg's survey.
The four-week moving average also saw a climb of 8,500, reaching 224,000, as announced by the US Labor Department on Thursday. US Treasury yields saw an increase throughout the day, with two-year yields rising by 2.6 basis points to hit 4.1%, while the 10-year yield climbed by 4.9 basis points to 4.3%. Furthermore, President Trump confirmed that his administration would proceed with the imposition of tariffs on Mexico and Canada next week, with an additional 10% tariff also set for China.
Specifically, Mexico and Canada are facing 25% tariffs effective March 4, alongside a potential 10% duty on energy exports to the US from Canada. Nigel Green, CEO of deVere Group, an independent financial advisory and asset management firm, expressed concern regarding the current economic situation.
He noted that a stagnant economy paired with rising prices presents an unfavorable scenario for policymakers, stating, 'It limits options, fuels uncertainty, and shakes investor confidence.' He further suggested that while the Federal Reserve might have been looking to ease rates, the recent trade policy changes could compel a reassessment, warning, 'Higher interest rates on ballooning government debt will further compound the crisis.' In housing market news, pending home sales in the US saw a decline of 4.6% in January, which was worse than the expected 0.9% decrease highlighted in a Bloomberg survey.
This follows a 4.1% drop in December, according to data from the National Association of Realtors, indicating a monthly sales index down 5.2% from January 2024. The US dollar index rose by 0.7% to reach 107.18. Meanwhile, gold futures fell by 1.1%, landing at $2,898.23, while silver futures dropped 1.4% to $31.82.
Contrarily, West Texas Intermediate crude oil futures saw a substantial increase of 2.3%, reaching $70.18 per barrel. In a significant political development, President Trump on Wednesday rescinded Chevron's permission to conduct operations in Venezuela, where the company was exporting approximately 240,000 barrels of oil daily.
This permission had been granted by the Biden administration in November 2022. This decision contributes to the tightening market dynamics, especially in light of improving prospects related to the ongoing Russia-Ukraine conflict, which has lasted for three years..