Dow Jones Industrial Average struggles to find topside momentum on Wednesday
|- The Dow Jones backslid another 150 points on Wednesday at its low point.
- Equity markets with little data to chew on are awaiting key earnings reports.
- Nvidia earnings are due after the closing bell, meaningful economic data starts Thursday.
The Dow Jones Industrial Average (DJIA) tested familiar lows on Wednesday, churning chart paper just north of the 43,000 handle. Markets are tepid as investors pull back slightly ahead of a key earnings report from major tech company Nvidia (NVDA) which is due after the bell, and a lack of meaningful economic figures throughout the front half of the trading week has left traders in the lurch. The Dow Jones managed to stage a late-day recovery to the 43,400 level, but gains remain thin as market participants look for reasons to bid further.
Nvidia is expecting a bumper revenue posting late Wednesday after markets close. The company forecasts $32.5 billion in quarterly revenue thanks to a wide uptick in demand for its AI-focused Backwell GPU offerings. Nvidia has a tendency to outpace revenue expectations, with the chipmaker beating earnings calls ten out of the last 12 quarters.
The first half of the trading week was in a significant data drought with limited impactful US economic prints on the offering.Thursday will kick off the week’s useful, market-moving information with Initial Jobless Claims for the week ended November 15. Net new jobless benefits seekers are expected to number 220K on a weekly basis, up slightly from the previous week. The US Philadelphia Fed Manufacturing Survey is also due on Thursday, and is expected to ease back to 8.0 in November from the previous month’s 10.3.
The key data print this week will be S&P Purchasing Managers Index (PMI) survey results, which are due on Friday. Markets are anticipating a slight increase in Manufacturing PMI figures, expected to rise to 48.8 from the previous 48.5, while the Services component is expected to rise by a similar amount, to 55.3 from 55.0.
Dow Jones news
The Dow Jones is roughly on-balance for the day as investors await a reason to move. About half of the major equity index is stuck in the red on Wednesday, though Nvidia’s pre-earnings action is dragging the tech darling down a little more than usual, sending the DJIA into a lopsided stance.
Unitedhealth Group (UNH) rallied over 3% during the midweek market session, climbing towards $600 per share. Health insurance remains a popular choice among investors as healthcare costs spiral out of control in the US. On the low end, Nvidia has backslid around 1.8% ahead of its post-bell earnings call, falling into $144 per share.
Dow Jones price forecast
The Dow Jones Industrial Average is holding onto 43,200 for dear life as investors reject the idea of allowing price action to fall back below the 43,000 handle without a fight. The DJIA is down nearly 3% from all-time highs posted a little over a week ago just above 44,400.
Despite a near-term backslide, the Dow Jones is sitting better than pretty; the major equity index is still trading well north of the 50-day Exponential Moving Average (EMA) near 42,500, and it’s been nearly 13 months since the Dow Jones last kissed the 200-day EMA which is now rising into 40,250.
Dow Jones daily chart
Nvidia FAQs
Nvidia is the leading fabless designer of graphics processing units or GPUs. These sophisticated devices allow computers to better process graphics for display interfaces by accelerating computer memory and RAM. This is especially true in the world of video games, where Nvidia graphics cards became a mainstay of the industry. Additionally, Nvidia is well-known as the creator of its CUDA API that allows developers to create software for a number of industries using its parallel computing platform. Nvidia chips are leading products in the data center, supercomputing and artificial intelligence industries. The company is also viewed as one of the inventors of the system-on-a-chip design.
Current CEO Jensen Huang founded Nvidia with Chris Malachowsky and Curtis Priem in 1993. All three founders were semiconductor engineers, who had previously worked at AMD, Sun Microsystems, IBM and Hewlett-Packard. The team set out to build more proficient GPUs than currently existed in the market and largely succeeded by late 1990s. The company was founded with $40,000 but secured $20 million in funding from Sequoia Capital venture fund early on. Nvidia went public in 1999 under the ticker NVDA. Nvidia became a leading designer of chips to the data center, PC, automotive and mobile markets through its close relationship with Taiwan Semiconductor.
In 2022, Nvidia released its ninth-generation data center GPU called the H100. This GPU is specifically designed with the needs of artificial intelligence applications in mind. For instance, OpenAI’s ChatGPT and GPT-4 large language models (LLMs) rely on the H100’s high efficiency in parallel processing to execute a high number of commands quickly. The chip is said to speed up networks by six times Nvidia’s previous A100 chip and is based on the new Hopper architecture. The H100 chip contains 80 billion transistors. Nvidia’s market cap reached $1 trillion in May 2023 largely on the promise of its H100 chip becoming the “picks and shovels” of the coming AI revolution. In June 2024, Nvidia's market capitalization crossed the $3 trillion mark.
Long-time CEO Jense Huang has a cult following in Silicon Valley and on Wall Street due to his strict loyalty and determination to build Nvidia into one of the world’s leading companies. Nvidia neary fell apart on several occasions, but each time Huang bet everything on a new technology that turned out to be the ticket to the company’s success. Huang is seen as a visionary in Silicon Valley, and his company is at the forefront of most major breakthroughs in computer processing. Huang is known for his enthusiastic keynote addresses at annual Nvidia GTC conferences, as well as his love of black leather jackets and Denny’s, the fast food chain where the company was founded.
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