Nvidia shares tumble after forecast but Dow sets new record

Nvidia shares tumbled on Thursday after a less-than-stellar forecast the previous day, dragging down the Nasdaq Composite, while the Dow Jones posted a record high on the back of reassuring economic data.
The AI chip maker had fallen by 6.38 per cent to $117.59 a share when trading closed in the US, coming after Nvidia’s third-quarter forecast failed to match investors’ high expectations.
The slide weighed on the Nasdaq Composite, which fell 0.23 per cent. The S&P 500 ended the day nearly unchanged, down 0.22 points.
Nvidia beat estimates when it reported its quarterly revenue forecast on Wednesday, but not by a sufficiently comfortable margin for investors.
Nvidia expects revenue of $32.5 billion next quarter, plus or minus two per cent. That beat the average estimation of $31.77 billion, but did not reach the highest projections of $37.9 billion.
“Everybody is pretty used to seeing phenomenal results,” Peter Andersen, founder of Andersen Capital Management, told The National on Wednesday.
Meanwhile, the Dow hit a record coming off strong economic data. The blue-chip index closed at 41,335.05 after rising 243.65 points – or 0.59 per cent – during trading.
The Commerce Department said the economy grew at a 3 per cent pace last quarter, upwardly revising its previous 2.8 per cent estimate.
The department said the growth was fuelled by strong consumer spending and business investment.
Consumer spending grew at a 2.9 per cent annualised rate last quarter. Business investment grew at a 7.5 per cent annualised rate, with equipment spending expanding by 10.8 per cent.
A separate report from the Labour Department showed the number of jobless claims are stabilising, Oxford Economics wrote to clients. Initial benefit claims fell 2,000 for the week ending August 24.
After a week dominated by Nvidia and AI, attention shifts back to the US inflation picture with the Federal Reserve’s preferred metric due to be released on Friday.
The Personal Consumption Expenditures Price Index is expected to rise from its current rate of 2.5 per cent year on year to 2.6 per cent, according to economists surveyed by FactSet.