Nvidia Corporation experienced a notable surge in its stock, climbing 4% after announcing it would soon resume sales of its H20 AI chips to China. This decision comes after weeks of pressure from the U.S. government, which guaranteed it would issue the required licenses for such sales to proceed. Sentiment overall was blistering as Trade Desk’s stock soared 14% of all things. This significant jump followed the announcement that the company would be added to the S&P 500, effective Friday, July 18th. At the same time, Wells Fargo and Black Rock market caps suffered doom and gloom as stocks reflected a bleak earnings outlook.
No wonder Nvidia’s CEO, Jensen Huang, is so optimistic about restarting chip sales. He added, “The U.S. government has promised NVIDIA that licenses will be approved and granted, and NVIDIA would like to begin deliveries in the near future. This announcement has indeed come at a big reversal for Nvidia, which has been facing political regulatory west concerning its activities in China.
Yet when the news about Nvidia’s soon-to-be-chipped sales hit the gloom, it sent a shockwave across the entire equities market. The company’s stock skyrocketed, a clear sign of investor belief that the business opportunity has been reinvigorated. As we’ve discussed in previous posts, global demand for AI technology is skyrocketing. By reinstating sales to China, Nvidia is shrewdly posturing itself to capitalize on its preeminence in this surging industry.
Nvidia was the big winner, but Trade Desk was the show stealer. Its stock price jumped 14% in after-hours trading immediately following news that it would be replacing Ansys in the S&P 500 index. This transition will likely make Trade Desk more visible and more credible to the investor and analyst communities as well.
Scott Wren, senior global market strategist, wanted to stress the bigger picture of the market. He continued, “The market is paying more attention to this year-over-year number, but what’s important is that the month-over-month headline CPI has come in below expectations for the last five months in a row. These findings indicate that market forces are still reactive to macroeconomic fundamentals, which is influencing investor confidence.
Wells Fargo’s shares were down 0.8% in premarket trading. This decline came on the heels of the bank’s announcement that it would be lowering its 2025 net income guidance to levels now expected for 2024. Despite beating earnings expectations, a cut to net interest income guidance stole the spotlight from strong earnings. Investors were expecting a 1% to 3% increase, but this announcement sent the stock tumbling 2% on the day.
BlackRock faced a tough hand when its stock fell about 3%. This was an even bigger drop after second-quarter revenues that disappointed Wall Street. The asset management giant’s financial performance reflects ongoing pressures in the financial markets, underscoring the volatility and uncertainty investors are currently navigating.
The market is clearly reacting in real time to these exciting new developments. Technological disruptions and regulatory shake-ups can just as quickly change the fortunes and stock prices of a company. Just look at Nvidia and Trade Desk—winners of the pandemic and accelerating their growth. At the same time, the much more conservative Wells Fargo and BlackRock are struggling with their downbeat forecasts.