Shares in Nvidia surged after the AI chipmaker released a revenue forecast and Fitch watched the U.S. credit rating as debt ceiling talks drag on. Here’s what investors need to know today.
1. Nvidia shares rally, lift more AI shares after bullish forecast
Surprisingly strong earnings report from Nvidia pushing stocks associated with Artificial Intelligence higher. Shares of Nvidia (NVDA) traded 25% higher premarket after reporting earnings, revenue and an outlook that beat analysts’ expectations as the chipmaker forecast $11 billion in revenue for the current quarter. Nvidia’s rise pushes it closer to a $1 trillion valuation as other AI-related stocks also moved higher, including Advanced Micro Devices (AMD) and TSMC (TSM).
2. Fitch puts US rating on watch after debt ceiling default
Fitch, one of the big three rating agencies, has downgraded the long-term US foreign currency issuer’s AAA rating to negative following the escalating drama over the debt ceiling negotiations in Washington. polecat said political partisanship and defeats in the debt ceiling debate prompted “Rating Watch Negative” as lawmakers continue to negotiate ahead of schedule Deadline June 1st.
3. Initial unemployment claims are expected to be posted
Investors will take another look at economic conditions when the first jobless claims are released at 8:30 a.m. ET. Claims are expected to rise to 245,000, up from 242,000 last week. Today also comes the second reading gross domestic product (GDP) It is expected to confirm that the economy grew by 1.1% in the first quarter. Pending home sales will be released at 10 a.m. ET and are expected to have risen 0.8% in April after falling 5.2% in March.
4. Snowflake stocks fall on weak leadership
Shares of cloud data platform provider Snowflake (SNOW) were down 14% in premarket trading after it issued weak guidance in its quarterly earnings report, despite a 48% year-over-year increase in revenue and an announcement that it would acquire search startup Neeva. But the company also forecast second-quarter revenue of up to $625 million, down from the $649 million that analysts had expected.
5. American Eagle Outfitters shares fall after retail outlook cut
American Eagle Outfitters (AEO) shares fell nearly 20% after the retailer cut its operating income forecast for the fiscal year while predicting that its full-year sales would be flat or in the single digits. The company previously forecast full-year sales to be flat or up in the single digits, joining Target and other retailers that have recently pulled back on retail sales projections.