U.S. stocks’ losses accelerate as rising bond yields, stronger dollar offset strong Nvidia earnings

What’s driving markets

Well-received earnings from AI chipmaker Nvidia
NVDA,
+3.64%
were the biggest story in markets on Thursday, even as an early jolt higher faded while the broader market slid into the red.

The chipmaking giant, which has been perhaps the biggest beneficiary of this year’s AI boom, reported a 141% surge in data-center sales and record earnings, while also serving up third-quarter revenue guidance of $15.68 billion to $16.32 billion, which surpassed Wall Street’s expectations.

Ivana Delevska, founder and CIO of Spear Invest, said Nvidia’s success would likely help boost the broader technology sector over time. However, even as the company surpassed Wall Street’s lofty expectations, the company faced an even higher bar among investors.

“I don’t think Nvidia could have reported anything stronger than this, but it’s still not impressing the market,” Delevska said.

Nvidia’s numbers failed to offset other macro factors that have bedeviled markets over the past few weeks, she added: “With the 10-year yield above 4%, people are looking for something to break,” she added.

Shares of Palantir Technologies
PLTR,
-6.34%,
Advanced Micro Devices
AMD,
-5.84%
and OpenAI investor Microsoft
MSFT,
-1.24%
erased premarket gains and turned lower, with Palantir and AMD down by more than 5% in recent trade around 11 a.m. Eastern Time.

Other members of the so-called “Magnificent Seven” group of megacap stocks also slid into the red, including Amazon.com Inc.
AMZN,
-1.74%,
Tesla Inc.
TSLA,
-1.15%,
Apple Inc.
AAPL,
-1.58%
as well as Google parent Alphabet Inc.
GOOGL,
-0.64%

GOOG,
-0.72%,
another major AI player with its Bard chatbot. Both Alphabet’s Class A and Class C shares traded in the red.

Treasury yields edged higher Thursday, paring some of Wednesday’s drop that had sent them to their lowest levels in a week.

The yield on the 10-year note
BX:TMUBMUSD10Y
rose 3 basis points to 4.214%. The ICE U.S. Dollar Index
DXY,
a gauge of the greenback’s value against major currencies, rose by 0.3% to 103.69.

Looking ahead, traders awaited a speech from Federal Reserve Chair Jerome Powell on Friday at the Kansas City Fed’s Jackson Hole Economic Symposium. The event, an annual highlight of the central bank’s summer calendar, begins Thursday.

See: Will Powell crush stocks again during Friday’s Jackson Hole speech? Here’s one reason investors shouldn’t worry.

Investors also received another batch of U.S. economic data Thursday, including weekly jobless benefit claims numbers. Data showed the number of Americans who applied for unemployment benefits last week fell by 10,000 to a three-week low of 230,000, offering further evidence that the labor market remains rock solid.

Data on durable-goods orders for long-lasting goods rose in July for the third month in row if recent ups and downs at Boeing are set aside. Orders increased 0.5% in July if transportation, autos and planes, are excluded.

Companies in focus

• Nvidia Corp.‘s shares
  NVDA,
  +3.64%
  rose after the graphics-chip maker late Wednesday reported a 141% surge in data-center sales and record results.

• Boeing stock
  BA,
  -3.62%
  fell along with shares of Spirit AeroSystems
  SPR,
  -13.78%
  after disclosing an issue with fastener holes on Boeing 737 Max aircraft.

• U.S. Steel stock
  X,
  -2.59%
  traded lower, extending a decline from Wednesday after Esmark withdrew its offer for the company that is being pursued by Cleveland-Cliffs
  CLF,
  -1.59%.

• Snowflake Inc.
  SNOW,
  -3.24%
  shares slipped after reporting quarterly earnings Wednesday. The company reported a fiscal second-quarter net loss of $227 million, or 69 cents a share, compared with a loss of $223 million, or 70 cents a share from the same period a year earlier. It also kept its full-year guidance steady, breaking from a pattern of guidance cuts.