S&P 500 advances in choppy trade as Nvidia rally bolsters tech

By Yasin Ebrahim

Investing.com -- The S&P 500 rose Thursday, but trading remained choppy as investors weigh fears about Federal Reserve rate hikes and an Nvidia-led jump in tech.

The S&P 500 gained 0.47%, the Dow Jones Industrial Average added 0.31%, or 69 points, and the Nasdaq Composite was up 0.70%.

Nvidia Corporation (NASDAQ:NVDA) delivered upbeat guidance following quarterly results that beat on both the top and bottom lines, sending its shares more than 14% higher.

The upbeat guidance, driven by expectations that the acceleration in artificial intelligence adoption will spur demand for Nvidia’s chips, forced some on Wall Street to turn bullish on the chipmaker and reverse their decision to remain on the sidelines.

“In hindsight, we acknowledge that our decision to remain on the sidelines in anticipation of a pullback in the company’s fundamentals was wrong,”  Goldman Sachs said as it upgraded its rating on the stock to Buy from Neutral.

Alibaba (NYSE:BABA), meanwhile, reported a fiscal third-quarter beat on earnings and revenue, though gross merchandise volume, a key performance metric measuring the volume of sales, fell mid-single-digits year-over-year in its core China market.

Moderna (NASDAQ:MRNA) reported fourth-quarter results that missed on the bottom line as rising costs and lower demand for its COVID-19 vaccine weighed on performance.

eBay (NASDAQ:EBAY) was also under pressure, falling 8% after its fourth-quarter results, and annual guidance fell short of Wall Street estimates.

“eBay’s full-year outlook suggests a year-on-year FXN [foreign exchange neutral] exit growth rate in 4Q23 of only -2% to -1%, therefore we lower our FY23 GMV estimates by 50bps to $71.2bn,” Deutsch Bank said in a note as it cut its price target on the stock to $50 from $55.

The choppy day of trading comes as sentiment on the broader market remained fragile amid fears of a more hawkish Federal Reserve.

“[I]t makes sense for stocks to give up some of the recent gains,” Wells Fargo said, as the recent rally in stocks was “largely based on the hopes that the terminal rate would remain just below 5% and rate cuts would occur at some point in the second half of this year.”

On the economic front, data showing fewer than expected initial jobless claims continued to flag the threat of an acceleration in wages that would likely keep inflation stickier for longer.

Communication services were a drag on the market, paced by a decline in Alphabet (NASDAQ:GOOGL) and Netflix (NASDAQ:NFLX).

Netflix fell more than 3% after the streaming giant cut subscription prices in over 30 countries as competition continues to heat up.