Dow, S&P 500, Nasdaq diverge after Nvidia earnings, economic data

Yahoo Finance’s Laura Bratton reports:

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Tech stocks dropped as Nvidia (NVDA) fell nearly 4% midday as Wall Street pointed to the AI chip giant’s outlook for first quarter gross margin as a sticking point following fourth quarter earnings which topped expectations.

Yahoo Finance’s Laura Bratton reports:

Shares of Nvidia have come under pressure since January as investors and analysts have raised questions about Big Tech’s continued AI spending.

Other semiconductor related stocks also fell on Thursday, including chip equipment maker ASML (ASML) and Nvidia competitor Advanced Micro Devices (AMD).

Concerns over a trade war with China and other countries may also be weighing on the sector. On Thursday morning President Trump said he would add another 10% tariff on Chinese goods, as well as move forward with levies against Mexico and Canada next week.

Stocks were mixed on Thursday mid-morning after President Trump confirmed tariffs against Mexico and Canada would go into effect next week and that he would also add another 10% levy on China.

The Dow Jones Industrial Average (^DJI) rose more than 300 points as Financials and Energy gained. The S&P 500 (^GSPC) rose slightly while the tech-heavy Nasdaq Composite (^IXIC) slid as tech stocks faltered.

Yahoo Finance’s Hamza Shaban reports:

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Warner Bros. Discovery (WBD) stock popped around 8% shortly after the opening bell on Thursday after the media giant reported subscriber guidance that came in ahead of estimates and a greater profit within its streaming unit.

The company ended 2024 with 116.9 million global streaming subscribers, an increase of 6.4 million global subscribers compared to the third quarter. This was above Wall Street’s expectations of 4.9 million net additions.

In the release, WBD said it expects “strong DTC subscriber growth to continue throughout 2025” and that “we now have a clear path to reach at least 150 million global subscribers by the end of 2026, with corresponding strong DTC revenue and adjusted EBITDA growth.”

Additionally, the streaming division posted profits of $409 million in the quarter compared to the loss of $55 million it reported in the year-ago period. Increased bundling with competitors, in addition to the subscriber gains in the quarter, helped aid profits.

Oil prices bounced above their yearly low on Thursday after President Trump canceled Chevron’s license to operate in Venezuela. Traders also assessed the potential impact of a new tariff on China and the impact of Canada and Mexico duties after the president said they would go into effect on March 4.

West Texas Intermediate crude (CL=F) rose more than 1.5% to hover around $70 per barrel. Brent futures (BZ=F) also popped to trade above $73 per barrel.

Oil moved higher on the heels of Trump’s social media post announcing the US would an oil concession with Venezuela dating back to November 2022. Though Chevron (CVX) was not mentioned by name, the agreement coincides with the date the US granted the company permission to produce and export Venezuelan oil, despite sanctions against President Nicolás Maduro’s government.

Meanwhile on Thursday morning Trump said tariffs against Mexico and Canada would go into effect as scheduled on March 4. While a full-blown tariff war could impact demand, the president’s plan presumably would include levies of 10% against Canadian petroleum imports.

Still, analysts believe Canada’s producers will eat most of the added tariff costs at first, since their infrastructure is not set up to export to many other markets besides the US.

Stocks were mixed on Thursday as chip heavyweight Nvidia (NVDA) led the tech sector higher following fourth quarter results. Meanwhile, investors digested the latest US economic data, including GDP, against the backdrop of President Trump’s evolving tariff plan.

The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.7%, while the S&P 500 (^GSPC) gained 0.5%. The Dow Jones Industrial Average (^DJI) rose above the flat line.

Shares of Nvidia popped in early trading after the company’s data center revenue clocked in at $35.6 billion versus expectations of $34 billion in the quarter.

Economic data released before the bell showed the US economy grew at an annualized rate of 2.3%, according to the Bureau of Economic Analysis’s second estimate of fourth quarter GDP.

Investors are assessing the impact of President Donald Trump’s tariff plan. On Thursday morning, the president said tariffs against Mexico and Canada will indeed move forward as scheduled on March 4. Trump also threatened new tariffs on the European Union on Wednesday.

Separately, data from the US Labor Department released Thursday showed 242,000 unemployment claims were filed in the week ending Feb. 22, ahead of Wall Street’s expectations for 221,000 and an increase of 22,000 from the previous week’s revised level. This marked the highest level of filed claims since December.

There was also a notable increase in D.C. jobless claims, with 2,047 claims filed last week versus 1,626 in the prior-week period. Overall, though, federal jobless claims did not show any obvious impact from DOGE-related layoffs, though economists warned the timing is still early.

Continuing weekly unemployment insurance claims also continued to hover at high levels, highlighting the ongoing challenge for workers to find a new job. Continuing claims during the week ending Feb. 15 ticked down slightly to 1.86 million, a decrease of 5,000 from the previous week’s revised level and below Wall Street expectations.

The US economy grew at an unrevised 2.3% annualized pace last quarter, on par with consensus estimates.

The Bureau of Economic Analysis’s (BEA) second estimate of fourth quarter US gross domestic product (GDP) was unchanged from the advanced estimate, which had shown 2.3% annualized growth.

The second estimate, based on more complete source data than the advanced estimate, suggests that economic growth in the fourth quarter was slower than the 3.1% annualized growth seen in the third quarter.

The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment, according to the BEA.

A third and final estimate for Q4 GDP growth will be released at the end of March.

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Salesforce (CRM) is downplaying the near-term revenue impact of its AI-powered Agentforce platform, and Wall Street isn’t thrilled.

Shares fell 3% in premarket trading after the company issued a weaker-than-expected 2025 outlook. Yahoo Finance’s Brian Sozzi breaks it down:

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