U.S. stock index futures fell on Wednesday evening, led by artificial intelligence major Nvidia after its second-quarter earnings beat market expectations but failed to lift its shares.
Futures retreated after a mildly positive session on Wall Street, where the S&P 500 hit a record high on some gains in technology shares.
But tech stocks drifted lower in aftermarket trade, led chiefly by NVIDIA Corporation (NASDAQ:NVDA) as the chipmaker’s data center revenue missed expectations amid heightened uncertainty over China.
S&P 500 Futures fell 0.3% to 6,475.25 points, while Nasdaq 100 Futures fell 0.5% to 23,506.0 points by 19:55 ET (23:55 GMT). Dow Jones Futures fell slightly to 45,618.0 points.
Nvidia falls on data center miss, China risks Nvidia fell 3.1% to $175.98 in aftermarket trade, with losses in the stock also spilling over into other chipmakers. Rival AMD (NASDAQ:AMD) fell 1.3%, while top supplier TSMC (NYSE:TSM) fell 1.4%.
Nvidia’s second-quarter earnings– $1.04 per share– beat expectations of $1.01, as did revenue, at $46.7 billion.
The company forecast current quarter revenue of $54 billion, plus or minus 2%, which is higher than expectations of $52.76 billion.
But Nvidia’s data center revenue, which is by far its biggest breadwinner, came in at $41.1 billion, missing estimates of $41.34 billion. The miss largely stemmed from Nvidia selling no H20 chips in China during the quarter.
While the company did receive approval from the U.S. government to resume H20 sales to China in late-July, Nvidia said that it had not shipped any chips to China since then. The company was also awaiting official word on Washington taking 15% of its H20 sales revenue in China. Nvidia CFO Colette Kress said the company will ship between $2 billion and $5 billion in H20 revenue in the current quarter, if geopolitical issues were to subside. But the outlook on China still remained highly uncertain.
Wall St upbeat, GDP and PCE data on tap Wall Street indexes clocked a mildly positive close on Wednesday, with the S&P 500 hitting a record high.
The S&P 500 rose 0.2% to 6,481.37 points, the NASDAQ Composite rose 0.2% to 21,590.14 points, and the Dow Jones Industrial Average rose 0.3% to 45,565.23 points.
U.S. stocks had rallied on a mostly positive second-quarter earnings season and increasing bets on a September interest rate cut by the Federal Reserve.
But this rally was seen cooling through late-August, amid emerging doubts over the Fed’s plans, as well as a sharp drop in technology shares.
Among other tech movers, cybersecurity firm CrowdStrike Holdings Inc (NASDAQ:CRWD) fell 4% afterhours as its current quarter guidance missed expectations.
Snowflake Inc (NYSE:SNOW) soared 13% after the cloud firm hiked its annual product revenue guidance.
Focus is now on a revised reading on second-quarter gross domestic product data, due later on Thursday. Analysts expect the reading to be unchanged at 3% quarter-on-quarter growth.
PCE price index data– the Fed’s preferred inflation gauge– is due on Friday, and will be closely watched for more cues on interest rates.
