Futures Subdued As Nvidia’s Forecast Disappoints, Geopolitical Tensions Mount

U.S. stock index futures were subdued on Thursday, as AI-heavyweight Nvidia’s revenue forecast failed to impress investors while caution prevailed over escalating tensions between Russia and Ukraine.

Nvidia (NVDA.O), beat quarterly profit expectations, but projected its slowest revenue growth in seven quarters and its adjusted gross margins shrank, sending its shares down 1.7% in premarket trading.

“At face value, Nvidia has once again generated the kind of growth that most companies will never achieve in their lifespan,” said Dan Coatsworth, investment analyst at AJ Bell.

“What’s troubled investors this time was a quarter-on-quarter decline in gross margins, with guidance for them to fall further in the coming quarter and weaker-than-expected forward guidance for revenue.”

The sentiment spread to other chip stocks, with Broadcom (AVGO.O), down 0.4%, Qualcomm (QCOM.O), losing 0.9% and Intel (INTC.O), off 0.5%.

Growth stocks were mixed. Meta Platforms (META.O), was up 0.4%, Apple (AAPL.O), gained 0.3%, while Tesla (TSLA.O), was off 0.3%.

At 6:57 a.m. ET, Dow E-minis were up 84 points, or 0.19%, S&P 500 E-minis were up 3.75 points, or 0.06% and Nasdaq 100 E-minis were down 19.5 points, or 0.09%.

Nvidia has led much of the U.S. market rally since mid-2023 on expectations that artificial intelligence integration could boost corporate profits. The stock has risen more than nine-fold in the past two years and the company boasts a market value of $3.5 trillion.

Wall Street indexes have retreated from their record highs, with post-election euphoria giving in to caution after President-elect Donald Trump named his cabinet picks, as markets weigh the potential inflationary impact of his policies.

Investors also kept an eye on escalating tensions between Russia and Ukraine, after Russia launched an intercontinental ballistic missile in retaliation against Ukraine’s strike using American and British missiles earlier this week.

On the data front, a weekly report on jobless claims is due at 8.30 a.m. ET, while comments from Federal Reserve officials Beth Hammack, Austan Goolsbee and Vice Chair for Supervision Michael Barr are on tap.

Meanwhile, Richmond Fed President Tom Barkin said the United States is more vulnerable to inflationary shocks than in the past, according to a media report.

Money market participants are pricing in a higher chance of the Fed lowering interest rates by 25 basis points at its December meeting – about 59.1%, according to the CME Group’s FedWatch.

Deere (DE.N), opens new tab shares gained marginally despite forecasting 2025 profit below Street expectations as demand for farm equipment slumped.

Alphabet (GOOGL.O), opens new tab dropped 0.4% after the Justice Department argued to a judge that Google must sell its Chrome browser and take other measures to end its monopoly on online search.

Crypto stocks such as MARA Holdings (MARA.O), jumped 10.9%, MicroStrategy (MSTR.O),  rose 11.3% and Coinbase (COIN.O), gained 2.9% as bitcoin prices soared to nearly $100,000 for the first time.

Snowflake (SNOW.N), raised its annual product revenue forecast and said it has teamed up with AI firm Anthropic to build up its cloud services, sending the data analytics provider’s shares up 21.5%.

Palo Alto Networks (PANW.O), lost 3.8% after announcing a two-for-one forward stock split after the cybersecurity firm topped quarterly revenue and profit expectations.

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