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Briefing.com Summary:
*NVIDIA posted some big results and some big guidance yet again, but the response hasn't been as big as in quarters past.
*Salesforce didn't miss estimates, but some think its in-line guidance has missed the mark.
*Initial and continuing jobless claims remained on a low-firing, low-hiring trajectory.
NVIDIA (NVDA) did it again. The AI leader easily exceeded quarterly expectations and provided next-quarter guidance that easily exceeded so-called "whisper numbers," which are expectations above consensus expectations. What has the market stumped, so to speak, is that the response to all that good news has been relatively tepid.
NVDA had been up more than 3.0% shortly after its results hit, but now it is up "just 0.9%." Market participants had been hoping for more, yet that fade is being attributed to concerns that NVIDIA can't possibly keep delivering such robust growth against the law of large numbers, budding competition, and potentially a scaling back of capex plans for hyperscalers.
Therefore, investors are feeling a bit more guarded than they have been in blowout quarters past, and that guardedness has quieted some of the market's recent kinetic rebound energy.
Another component at work is the weakness in Dow component and software-as-a-service leader Salesforce (CRM) after its report. The quarterly results were actually better than expected, but the company's in-line guidance for FY27 didn't vanquish the concerns about AI disrupting software industry business models. Shares of CRM are down 1.7% in pre-market trading.
There is some misdirection, though, with this introduction. It sounds like a setup for a negative start for the market, but in fact the market might be mixed and little changed at worst when the opening bell rings.
Currently, the S&P 500 futures are up six points and are trading 0.1% above fair value, the Nasdaq 100 futures are up six points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are up 94 points and are trading 0.2% above fair value.
That's not bad, but to reiterate, it isn't as good as one might have expected knowing that NVIDIA put up the numbers it did.
Alas, there is a bit of a wait-and-see mentality permeating the pre-open trade. Participants are waiting to see if NVIDIA can get into overdrive in the cash session or if it shifts into reverse and takes market sentiment along with it. The same goes for Salesforce and the software stocks.
There weren't any problems with the latest jobless claims report. Initial jobless claims for the week ending February 21 increased by 4,000 to 212,000 (Briefing.com consensus: 211,000). Continuing jobless claims for the week ending February 14 decreased by 31,000 to 1.833 million.
The key takeaway from the report is its persistent low-firing, low-hiring messaging.
The Treasury market, which has been absorbing new issuance this week, took the news in stride. The 2-yr note yield is unchanged at 3.47%, and the 10-yr note yield is down one basis point to 4.04% ahead of today's $44 billion 7-yr note auction. Results from that auction will be released at 1:00 p.m. ET.
Results from NVIDIA's influence on the market, meanwhile, will be available at 4:00 p.m. ET.
