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Dow, S&P 500 and Nasdaq futures rise as investors weigh Nvidia’s gains

Vaseline November 21, 2024

U.S. stock futures rose Thursday, reversing earlier premarket losses as investors dug into Nvidia’s ( NVDA ) earnings and lackluster revenue forecasts for insight into the prospects for AI-powered growth.

Dow Jones Industrial Average futures (YM=F) led the gains, rising 0.4%, while S&P 500 futures (ES=F) added 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) rose 0.1%, marking a quiet day for the major gauges.

Nvidia beat third-quarter earnings, but the chipmaker forecast its slowest revenue growth in seven quarters as it faced supply chain issues. These restrictions will limit supplies of the new flagship Blackwell chip, the company said, but will also result in demand exceeding supply by 2026.

That suggests a sales increase is merely being put on hold until problems subside, some analysts suggested, given the lack of significant competitors in AI chip manufacturing.

Shares of Nvidia fell about 1% in premarket trading, recovering from a deeper decline earlier Thursday morning as investors debated the future of the AI boom.

Elsewhere in the tech sector, shares of Alphabet (GOOG, GOOGL) fell after the DOJ asked a judge to force its Google unit to sell its Chrome browser. But the antitrust team steered clear of Android, proposing a choice between divesting its mobile operating system business or taking strict action.

Weekly unemployment claims due later Thursday will provide market insight into the labor market as they weigh the Federal Reserve’s interest in rate cuts. Traders now estimate a 44% chance that the Fed will hold at its December meeting, up from about 28% a week ago, according to the CME FedWatch tool.

Investors are also on edge that Donald Trump will end the protracted wait for his choice for Treasury secretary, as they assess the likely impact of the president-elect’s cabinet choices on the economy’s outlook.

Meanwhile, bitcoin (BTC-USD) climbed 5% to a new all-time high above $98,000. The largest cryptocurrency is nearing the major milestone of $100,000 amid reports that Trump’s team is debating whether to appoint a White House crypto policy chief.

LIVE 4 updates

Good morning. This is what’s happening today.
Bitcoin rises 5% in sign of getting closer to $100,000

Bitcoin (BTC-USD) rose more than 5% to a record high on Thursday morning, trading just above $98,000, amid speculation about pro-crypto policies from an incoming Trump administration.

The token is up about 40% since the presidential election earlier this month and has hit multiple milestones as investors eye the $100,000 target.

Reports that President-elect Donald Trump’s transition team has discussed the possibility of a first-ever crypto policy chief for the White House have helped push the token’s delisting in the past 24 hours.

Bitcoin has been a major part of the “Trump trade,” as the new president has promised to explore crypto-friendly initiatives, including building a national bitcoin stockpile.
Target’s stock price is stabilizing after Wednesday’s rough run

The Target (TGT) ticker page on Yahoo Finance is still seeing a lot of interest after dropping 21.9% following Wednesday’s earnings beat.

Shares are up slightly in the pre-market.

From top to bottom, Target’s results were downright stinking. The reality is that the stock will likely remain in the penalty box until Target can deliver at least two quarters of healthy earnings thanks to stronger sales.

I think Deutsche Bank analyst Krisztina Katai has summarized the problems well:

“The results indicate a significant deterioration in market share, especially for Walmart (WMT) and Amazon (AMZN). This, combined with the necessary investments in infrastructure and supply chain modernization to remain competitive, suggests that the recovery will take longer than initially expected. While we still believe Target’s long-term potential remains, regaining lost market share will likely require substantial price investments and increased promotions, putting pressure on margins and profitability.”

Below I list some of the challenges Target faces.
Important point about Nvidia making the rounds

Nvidia (NVDA) is under some pressure in the pre-market after last night’s earnings results.

That makes sense, because Jensen hasn’t blown everyone away with quarterly revenue guidance. But to be clear, the guidance was impressive – just not at the high end of some very robust Street estimates.

However, an important point that made the rounds this morning in the margins of Nvidia.

If the sell-off accelerates during the session, it could be a result of some near-term margin concerns as Nvidia ramps up production of its latest AI chip Blackwell. During disaster periods, costs are typically high and profit margins are not at peak levels.

Comments Keybanc analyst John Vinh:

“Nvidia noted that supply on Blackwell was limited in the fourth quarter of the fiscal year and, given the increase in multiple platforms, expects gross margin to temporarily be in the low 70s in the first quarter of 2026 before turning into the second half returns to the mid-70s.”