The New York stock market ended lower on Wednesday, ahead of Nvidia’s quarterly earnings report.
All three major indices dropped more than 0.5%.
However, Nvidia released better-than-expected quarterly results after the closing bell, causing its stock to surge in after-hours trading.
Markets Retreat After Brief Rally
After a nearly 2% rally the previous day, fueled by U.S. President Donald Trump’s decision to delay the 50% European Union (EU) tariff until July 9, the New York stock market reversed course on Wednesday, closing down about 0.5%.
The Dow Jones Industrial Average shed 244.95 points (0.58%) to finish at 42,098.70, while the S&P 500 dropped 32.99 points (0.56%) to 5,888.55.
The Nasdaq Composite declined 98.23 points (0.51%) to end at 19,100.94.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, rose 0.35 points (1.85%) to 19.31.
Nvidia Delivers Surprise Earnings
Despite intense speculation among investors, Nvidia’s post-market earnings release exceeded expectations, alleviating concerns and boosting investor confidence.
Nvidia’s results for the first fiscal quarter, ending in April, significantly outperformed projections.
It reported revenue of 44.06 billion USD and adjusted earnings per share (EPS) of 0.96 USD.
These figures surpassed Wall Street’s estimates of 43.31 billion USD in revenue and 0.93 EPS USD.
Nvidia attributed its robust performance to a 73% year-over-year surge in revenue from its data center segment, which focuses on artificial intelligence (AI) technologies.
Overall revenue jumped 69% compared to the same period last year, with data center revenue soaring 73% to 39.1 billion USD.
Net income climbed 26% to reach 18.8 billion USD.
For the upcoming fiscal second quarter ending in July, Nvidia projects revenue of 45 billion USD.
While Nvidia’s stock dipped 0.69 USD (0.51%) to 134.81 USD in regular trading, it surged 4.50 USD (3.34%) to 139.31 USD in after-hours trading.
Nvidia’s impressive results are expected to catalyze a broader rally in tech stocks.
Tesla Shares Slide 1.7%
Among the M7 tech companies, only Apple and Meta Platforms increased slightly.
Apple inched up 0.21 USD (0.10%) to 200.42 USD, while Meta added 1.26 USD (0.20%) to close at 643.58 USD.
The remaining five stocks, including Nvidia, all declined.
These stocks had been trending upward until late in the session but turned negative due to late selling.
Tesla, which initially dropped 1.2% before fluctuating around breakeven in the afternoon, ultimately closed down 1.7%.
The recent friction between Tesla CEO Elon Musk and U.S. President Donald Trump appears to have contributed to the stock’s decline.
Tesla finished the day down 5.99 USD (1.65%) at 356.90 USD.
Despite the day’s losses, experts remain optimistic about Tesla’s short-term prospects.
Tesla’s upcoming launch of a self-driving taxi service in Austin, Texas, next month is highly expected to become a significant revenue driver for Tesla.
Technically, analysts also predict Tesla’s stock could climb as high as 384 USD.
Will Templeton, a chart analyst at Fairlead Strategies, noted that Tesla’s charts show positive short-term momentum, identifying 384 USD as the first resistance level.
