Wall Street Update: Nasdaq Soars on Strong GDP Data; Nvidia Drops 3%

On Thursday, August 29, the tech-heavy Nasdaq led Wall Street’s main indexes higher following a report showing the U.S. economy grew by 3% in the second quarter, driven by robust consumer spending. This economic boost also increased speculation about a potential Federal Reserve rate cut in September. However, Nvidia’s shares fell 3% as its forecast for the coming quarter did not meet the high expectations set by investors.

By mid-morning, the Dow Jones Industrial Average was up 289.54 points, or 0.70%, reaching 41,380.96. The S&P 500 gained 39.02 points, or 0.70%, hitting 5,631.20, while the Nasdaq Composite rose 182.80 points, or 1.04%, to 17,738.82. The Commerce Department’s report indicated stronger-than-expected economic growth, supported by increased consumer spending.

Jobless claims for the previous week came in slightly below expectations. Friday’s Personal Consumption Expenditures data for June could provide further insights into the Federal Reserve’s plans for easing monetary policy. According to CME Group’s Fed Watch Tool, there’s a 67.5% chance of a 25-basis-point rate cut in September and a 32.5% chance of a 50-basis-point cut.

Stock Market Highlights

Nvidia’s stock dropped 3.2% following its latest earnings report. Despite reporting strong second-quarter results, the company’s revenue forecast for the upcoming quarter disappointed investors. In contrast, semiconductor peers like Broadcom and Advanced Micro Devices saw their stocks rise by 1.7% and 1.1%, respectively, contributing to a 1.6% increase in the Philadelphia SE Semiconductor index.

Tech giants Microsoft, Meta, and Alphabet also saw gains of more than 1.5% each, while Apple’s shares jumped 2.4% after Citigroup named it as its top AI pick over Nvidia. This helped boost the tech sector by 0.9%.

The broader market saw gains across nine out of 11 sectors, with communication services leading the way. The S&P 500 is now about 0.6% below its record high, and the Dow Jones hit an all-time peak. CrowdStrike rose 4.6% after surpassing quarterly revenue estimates.

Dollar General Hits Record Low

Dollar General’s stock plummeted 29% by late morning, the steepest drop since the company’s IPO in 2009. The discount retailer lowered its full-year sales forecast, citing reduced consumer spending on essentials due to ongoing inflation and rising costs for rent and healthcare. Dollar Tree, a competitor, also saw its shares fall about 10% ahead of its upcoming earnings report.

Global and Currency Markets

European stocks gained 0.75%, fueled by strong performance in technology shares. MSCI’s global stock index rose 0.28% to 829.66. The yield on the benchmark U.S. 10-year Treasury notes increased by 2.6 basis points to 3.867%.

The U.S. dollar strengthened after the GDP report, with the dollar index rising 0.52% to 101.53. The euro fell 0.53% to $1.1061. Gold prices also climbed, approaching record highs. Spot gold increased by 0.51% to $2,514.89 per ounce, while U.S. gold futures were up 0.63% to $2,518.30 per ounce.