FX.co ★ U.S. Stocks Recover Late In The Day To Close Roughly Flat

Stocks showed resilience on Wednesday, recovering from earlier losses to end the trading session with slight variations. The Dow Jones Industrial Average closed with a rise of 139.53 points or 0.3%, settling at 43,408.47. Meanwhile, the S&P 500 saw minimal movement, edging up just 0.13 points to 5,917.11. In contrast, the Nasdaq, known for its concentration in technology stocks, experienced a minor decline of 21.32 points or 0.1%, closing at 18,966.14, despite a significant recovery effort after initially plunging by up to 1.4%.

This relatively steady close for the major indices occurred as investors anticipated the release of quarterly earnings from Nvidia (NVDA), a key player in the AI sector, scheduled after Wednesday's trading concluded. Nvidia's stock fluctuated during the session, ultimately finishing 0.8% lower.

AJ Bell investment analyst Dan Coatsworth commented on Nvidia's outlook, stating, "While demand for Nvidia's offerings remains strong, investor focus will be on the details surrounding the new Blackwell chip and any guidance on increasing supplies in 2025." Coatsworth added, "Nvidia is projected to report earnings of $0.746 per share on revenues of $33.09 billion, but surpassing these estimates might not suffice to drive the stock upward. Nvidia must also provide reassurance about the Blackwell chip and articulate why the excitement around AI will sustain through 2025, 2026, and beyond."

The late-session volatility was partly due to subdued trading activity amidst a shortage of significant U.S. economic data. Additionally, investors appeared cautious, keeping an eye on international developments amid escalating Russia-Ukraine tensions.

In sector-specific news, biotechnology stocks fared well, propelling the NYSE Arca Biotechnology Index up by 1.8%, continuing its recovery from a three-month low hit on Monday. Rising crude oil prices bolstered oil service stocks, while healthcare and pharmaceutical sectors also performed robustly. Conversely, computer hardware stocks faced notable pressure; the NYSE Arca Computer Hardware Index dropped by 1.3% following gains in the previous two sessions, weighed down by a pronounced decline in Super Micro Computer (SMCI) shares.

Elsewhere, Asian markets showed mixed results on Wednesday. Japan’s Nikkei 225 Index fell by 0.2%, whereas China’s Shanghai Composite Index rose by 0.7%. European markets saw a downward trend, with the French CAC 40 Index decreasing by 0.4%, the German DAX Index by 0.3%, and the UK's FTSE 100 Index slipping by 0.2%.

In the bond market, U.S. Treasuries rebounded slightly from early setbacks but still ended lower. The yield on the benchmark ten-year note, which inversely correlates with its price, increased by 2.7 basis points to 4.406%.

Looking forward, Thursday’s trading is expected to be influenced by Nvidia’s earnings report, along with data on weekly jobless claims and existing home sales, which may capture investors' attention.