(Reuters) – Nasdaq futures led declines among U.S. stock index futures on Thursday, with Nvidia shares falling in premarket trading after investors were unimpressed by the AI leader’s revenue forecast.
At 4:20 a.m. ET, the Dow E-minis were down 80 points, or 0.18 percent, the S&P 500 E-minis were down 25.75 points, or 0.43 percent, and the Nasdaq 100 E-minis were down with 127.75 points or 0.62%.
Nvidia beat quarterly profit expectations, but the company forecast the slowest revenue growth in seven quarters and adjusted gross margins shrank, sending shares down 3.8% in premarket trading.
“On the face of it, Nvidia has once again generated the kind of growth that most companies never achieve in their lifetime,” said Dan Coatsworth, investment analyst at AJ Bell.
“What alarmed investors this time around was a quarter-over-quarter decline in gross margins, with expectations of them falling further in the coming quarter and weaker-than-expected expectations for revenue.”
The sentiment spread to other chip stocks, with Broadcom down 1%, Qualcomm down 1.1% and Advanced Micro Devices down 0.7%.
Growth stocks also fell. Microsoft fell 0.3%, while Apple and Amazon.com each fell 0.2%.
Nvidia has led much of the U.S. market rally since mid-2023 on expectations that integrating artificial intelligence could boost corporate profits. The stock has risen more than ninefold in the past two years and the company has a market value of $3.5 trillion.
Wall Street indexes have retreated from record highs, with post-election euphoria giving way to caution after President-elect Donald Trump named his Cabinet picks as markets weigh the potential inflationary impact of his policies.
Investors also kept an eye on escalating tensions between Russia and Ukraine after Russia launched an intercontinental ballistic missile earlier this week in retaliation against the Ukrainian attack with US and British missiles.
On the data front, a weekly report on unemployment claims is expected at 8:30 a.m. ET, while comments from Federal Reserve officials Beth Hammack, Austan Goolsbee and Vice Chairman for Oversight Michael Barr are available.
Money market participants are pricing in a higher probability that the Fed will cut rates by 25 basis points at its December meeting – about 55.7%, according to CME Group’s FedWatch.
Alphabet fell 0.5% after the Justice Department argued to a judge that Google must sell its Chrome browser and take other steps to end its monopoly on online search.
Crypto stocks like MARA Holdings rose 9.3%, MicroStrategy rose 8.6% and Coinbase gained 2.9% as bitcoin prices rose to nearly $100,000 for the first time.
Deere, Baidu and PDD Holdings are among the companies that will report their quarterly results before the market opens.
Snowflake raised its annual product revenue forecast and said it is working with AI company Anthropic to build its cloud services, sending the data analytics provider’s shares up 20%.
Palo Alto Networks lost 5.3% after announcing a two-for-one stock split after the cybersecurity company beat quarterly revenue and profit estimates.
(Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai)
