Stock Market Surges as Nvidia Earnings Impress, Alphabet Faces Scrutiny

US stocks experienced a volatile trading day on Thursday, November 21, 2024, as investors reacted to Nvidia's impressive earnings report while grappling with Alphabet's significant decline amid regulatory pressures. The Dow Jones Industrial Average surged over 450 points, reflecting strong investor sentiment in certain sectors, while the tech-heavy Nasdaq faced challenges from major players like Alphabet.

Key Takeaways

• Dow Jones Industrial Average rose over 450 points, or about 1.1%.
• S&P 500 gained 0.5%, while the Nasdaq Composite managed to close just above the flat line.
• Nvidia reported strong earnings but forecasted slower revenue growth due to supply chain issues.
• Alphabet shares tumbled over 6% following a Department of Justice request to divest its Chrome browser.
• Bitcoin reached a new all-time high, nearing $99,000, amid speculation of favorable crypto policies from the incoming administration.

Nvidia's Earnings Report

Nvidia's latest earnings report showcased the company's continued dominance in the AI chip market. The chipmaker exceeded profit expectations but warned of its slowest revenue growth in seven quarters due to ongoing supply chain constraints. Analysts noted that while the new flagship Blackwell chip's deliveries would be limited, demand is expected to outstrip supply into 2026, suggesting potential revenue boosts in the future.

• Earnings Highlights:
  • Profit exceeded expectations.
  • Forecasted revenue growth slowdown due to supply chain issues.
  • Analysts remain optimistic about Nvidia's market position.

Alphabet's Regulatory Challenges

In stark contrast to Nvidia's success, Alphabet faced significant headwinds as its stock price plummeted following news of a Department of Justice initiative to force the company to sell its Chrome browser. This regulatory scrutiny raised concerns among investors about the future of Alphabet's business model and its ability to maintain market dominance.

• Impact on Alphabet:
  • Shares fell over 6% during trading.
  • Investors are concerned about potential breakups of the tech giant.

Broader Market Trends

The broader market showed a mixed response, with investors rotating out of big tech stocks and favoring sectors like Utilities, Industrials, and Financials. The financial sector led the day, rising more than 1.5%, while the Consumer Discretionary and Communications Services sectors lagged behind.

• Sector Performance:
  • Financials: +1.5%
  • Utilities: Strong performance
  • Consumer Discretionary: Underperformed

Macroeconomic Indicators

On the macroeconomic front, weekly jobless claims fell to 213,000, indicating a healthier labor market. This decline has led investors to speculate on the Federal Reserve's potential interest rate decisions, with a 44% chance of maintaining current rates at the upcoming December meeting.

• Jobless Claims:
  • Current claims: 213,000
  • Previous week: 219,000
  • Economists expected: 220,000

Cryptocurrency Market Reaction

In the cryptocurrency market, Bitcoin surged to a new all-time high, briefly trading just below $99,000. This rally was fueled by optimism surrounding the incoming administration's potential for more crypto-friendly policies, particularly following the announcement of SEC Chair Gary Gensler's upcoming departure.

• Bitcoin Performance:
  • Current price: Near $99,000
  • Anticipated policies could further boost the crypto market.

Overall, the stock market's reaction to Nvidia's earnings and Alphabet's challenges highlights the ongoing volatility and shifting investor sentiment in the tech sector, as well as broader economic indicators that could influence future market movements.

Sources

• Yahoo is part of the Yahoo family of brands, Yahoo Finance.
• Stock market today: Dow, S&P 500 jump after Nvidia earnings, while Alphabet tumbles, Yahoo Finance.
• Yahooist Teil der Yahoo Markenfamilie, Yahoo Finance.
• Stock market today: Dow, S&P 500 jump after Nvidia earnings, while Alphabet tumbles, Yahoo Finance.
• Stock market today: Dow, S&P 500 jump after Nvidia earnings, while Alphabet tumbles, Yahoo Finance.