Traders work on the floor of the New York Stock Exchange.
Stocks fell Thursday as excitement around blockbuster Nvidia results failed to boost the broader market, and investors looked ahead to a key speech from Federal Reserve Chairman Jerome Powell.
Nvidia shares gained 2.8% and reached an all-time high after the company reported quarterly earnings and revenue that exceeded lofty analyst expectations. The company also raised its guidance, with executives predicting third-quarter revenue would climb to $16 billion, or a year-over-year increase of 170%.
This marks the second straight quarterly report from Nvidia that blew away expectations. The first-quarter numbers, released in May, helped stoke investor interest in artificial intelligence, which became a key market driver in the first half of the year. Interest in the chip stock catapulted its value to more than $1 trillion.
However, that wasn’t enough to lift the broader tech sector. Shares of Amazon lost 2.1% and Apple declined 1.6%, while Netflix shed 3.8%. The information technology sector was among the S&P 500’s biggest losers, down 1.3%.
“I think it’s a very narrowly focused market,” Phillip Colmar, global strategist at MRB Partners, said, adding that just a few names are driving the entire market. “I do think if you’ve got a better growth backdrop and higher bond yields, it lends itself naturally to a broadening of the market. We saw some of that in recent weeks.”
Colmar noted that he would lighten up on the tech sector, given its recent moves higher this year. “Themes sometimes get front loaded into the price action and then it takes a while to catch up,” he said.
U.S. Treasury yields were higher on Thursday as investors waited for signals on monetary policy from Powell’s comments at the Jackson Hole, Wyoming meeting on Friday. The yield on the benchmark 10-year Treasury note was up around 2 basis points at 4.217%, after hitting a 16-year high on Monday.