Wall Street gained momentum as traders reacted to Nvidia's (NVDA) much-anticipated second-quarter results, which beat expectations overall despite weaker-than-expected data center sales. Nvidia shares closed 0.8% lower but rebounded from early losses, helping lift the broader market.
The Commerce Department reported that U.S. personal income and spending rose in July, with core consumer price inflation edging up to 2.9% from 2.8%, a key gauge for the Fed's rate outlook. Markets are pricing in an 87.2% chance of a September quarter-point rate cut, according to CME's FedWatch Tool. Separately, revised data showed second-quarter GDP growth at 3.3%, up from the earlier 3%, driven by stronger investment and consumer spending.
Labor Department released a separate report showed a modest decrease by first-time claims for U.S. unemployment benefits in the week ended August 23rd. It also said initial jobless claims dipped to 229,000, a decrease of 5,000 from the previous week's revised level of 234,000.
Most of the major sectors showed only modest moves on the day, computer hardware stocks moved sharply higher, driving the NYSE Arca Computer Hardware Index up by 4.4% to a record closing high. Pure Storage (PSTG) skyrocketed by 32.3% after reporting better than expected second quarter results and raising its full-year guidance, helped lead the sector higher. Networking and software stocks too were notably strong, contributing to the advance by the tech-heavy Nasdaq while utilities and telecom stocks moved to the downside.
Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index climbed by 0.7% and China's Shanghai Composite Index jumped by 1.1%, although Hong Kong's Hang Seng Index bucked the uptrend and slid by 0.8%. The major European markets turned in a mixed performance on the day while the French CAC 40 Index edged up by 0.2%, the German DAX Index closed just below the unchanged line and the U.K.'s FTSE 100 Index fell by 0.4%.
In the bond market, treasuries extended the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 4.20%.
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