NASDAQ Faces Sharpest Decline in Weeks

This morning's rally, led by chipmaker Nvidia's big earnings report, proved short-lived, with stocks tumbling in afternoon trading to post their worst session in weeks.

The Nasdaq plummeted 1.9%, its worst day in three weeks. The S&P 500 lost 1.4% and the Dow Jones Industrial Average fell 1.1%.

Investors are looking to Jackson Hole, the Kansas City Fed's annual forum for central bank leaders, where Fed officials will speak, possibly signaling their intentions for interest rates for the rest of the year. The forum kicked off today, with multiple Fed officials giving diverging opinions on the likelihood of further interest rate hikes this year. Fed Chair Jerome Powell is scheduled to speak tomorrow at 10:05 a.m. ET.

At its annual meeting, hosted this year in South Africa, BRICS leaders invited six countries, including Saudi Arabia and Iran, to join the alliance of ascendant economies.

Yesterday, stocks gained in anticipation of Nvidia's earnings. The Nasdaq gained 1.6%, while the S&P 500 rose 1.1% and the Dow climbed 0.5%.

S&P 500's Biggest Gains and Losses

Here are the S&P 500 stocks that gained and lost the most today.

Dow Loses 375 Points as Tech Hype Cools

Despite another strong earnings report from chipmaker Nvidia, the Dow Jones Industrial Average fell 1.1%, or about 375 points, its largest drop since May.

Travelers Companies (TRV) and Verizon (VZ) were the Dow’s best-performing stocks, both gaining 0.6%. Dow Inc. (DOW) was one of the only other Dow components to gain, rising 0.3%.

Boeing (BA) shares tumbled 4.9% on reports that it would suffer more delays in the delivery of its 737 Max after issues with parts from contractor Spirit AeroSystems (SPR). It is the second time since April that manufacturing flaws have delayed 737 Max deliveries. Spirit shares plummeted 13%.

Intel (INTC) shares dropped 4.1% after its competitor Nvidia (NVDA) forecasted better-than-expected sales in the current quarter on continued interest in artificial intelligence (AI). Nvidia jumped 6% at the open, before giving up gains to finish 0.1% higher.

Walt Disney Company (DIS) shares fell 3.9% to $82.47, their lowest level since October 2014.

The technology sector declined 2.2% today as AI enthusiasm lost some steam. Apple (AAPL) dropped 2.6%, Microsoft (MSFT) fell 2.2%, and Salesforce (CRM) gave up 1.7%. International Business Machines (IBM) bucked the trend, rising 0.1%.

-Terry Lane

Fed Officials Split on Need for More Rate Hikes

Ask two officials at the Federal Reserve about the need for more rate hikes, and you’ll likely get two different answers.

“We’ll let the next couple of weeks play out in terms of data. But right now, I think that we've probably done enough,” said Patrick Harker, chair of the Federal Reserve Bank of Philadelphia and a voting member of the central bank's policy committee, in an interview with MSNBC Thursday.

Whereas the Boston Fed's Susan Collins, a non-voting member, told Yahoo! Finance, “We may need additional increments, and we may be very near a place where we can hold for a substantial amount of time.”

But both agree the decision to hike rates or not would be based on economic data. There is another month of reports before the Fed’s next meeting, which will provide more information about how well the Fed’s war on inflation is going.

-Diccon Hyatt

Apple Shares Fall After Reports It Supports California Right-to-Repair Bill

Shares of Apple (AAPL) fell 2% Thursday afternoon after it endorsed California right to repair legislation in an about-face for the company that has long opposed similar bills.

In a letter to Senator Susan Talamantes Eggman, the bill’s sponsor, the iPhone maker expressed support for the legislation that would make it easier for electronics owners to repair electronics like smartphones and home appliances. Eggman’s bill would require companies that sell products for more than $100 to make replacement guides, parts, and tools for at least three years after discontinuing the product.

Apple has historically opposed right-to-repair bills, which would hurt new product sales and use of its insurance program, AppleCare+.1

Apple said it would continue to support California’s legislation as long as the bill “includes requirements that would protect individual users’ safety and security, as well as product manufacturers’ intellectual property.”2

Midday Market Movers

Guess? Inc. (GES): Shares of the fashion brand gained 25% after it reported better-than-expected revenue and earnings for the most recent quarter.

SharkNinja Inc. (SN): Shares of the household appliances manufacturer gained 11% after it said net sales grew 22% in the most recent quarter, with the increase being driven primarily by a surge in sales of its cooking appliances in Europe.

Advanced Micro Devices (AMD): Shares of the semiconductor maker fell 7% after competitor Nvidia reported a huge jump in data center revenue and forecast continued strength in the current quarter.

Marathon Digital Holdings Inc. (MARA): Shares of the bitcoin miner fell 10% as cryptocurrencies continued to slide, with the price of Bitcoin falling to just over $26,000 and Ethereum at about $1,650.

Burlington Stores Inc. (BURL): Shares of the retailer fell 9% after it beat Wall Street’s second-quarter earnings expectations, but warned of weakness among lower-income consumers.

Dollar Tree Beats Q2 Estimates but Comes Up Short on Margins

Dollar Tree Inc. (DLTR) shares fell 11% Thursday after the discount retailer posted stronger-than-expected second-quarter results, but was pressured by narrower margins.

Net income totaled $200.4 million, or 91 cents a share, down from $360 million, or $1.60 per share in the same quarter last year, which marked a second-quarter record.34 The results topped consensus estimates of 87 cents a share.

Net sales, which combine the revenue of the company's three main stores—Dollar Tree, Family Dollar, and Enterprise—were up 8.2% to $7.32 billion.4

On the downside, gross margin, or the amount of revenue a company retains after direct sales expenses are factored in, fell 220 basis points to 29.2%, reflecting lower mark-ons—the difference between what a good costs to produce and what it sells for—and an unfavorable sales mix. The company also cited higher “shrink,” the loss of inventory, often to theft.

The stock was flat for the year before today's 11% decline.

-Mack Wilowski

The Dollar Approaches 3-Month High

The dollar gained relative to most major currencies Thursday, with the U.S. Dollar Index (DXY) rising 0.4% to its highest level since early June.

The dollar was up 0.7% against the British pound and the Japanese yen midday Thursday. It also climbed 0.3% relative to the euro.

Boeing Says Defect to Delay Deliveries of Best-Selling 737 Max

A manufacturing flaw will delay near-term deliveries of Boeing Co.'s (BA) 737 Max, the company said Thursday.

Spirit AeroSystems (SPR), which makes the affected components for Boeing, said only some units would be affected. Still, Boeing will need to inspect all possibly affected aircraft and make repairs, a setback as it tries to reach a goal of delivering 400 to 450 737 Maxes this year.

The flaw is the latest in a series of manufacturing problems the jet maker has faced this year as it has ramped up production to meet booming travel demand.

Shares of Boeing and Spirit fell 3% and 14%, respectively, on Thursday. Still Boeing stock is up almost 13% this year. Spirit shares have lost about a third of their value in the same period of time.

AMD Acquires French AI Software Company Mipsology

Advanced Micro Devices Inc. (AMD) has acquired Mipsology, an artificial intelligence (AI) software company focused on computer interpretations and responses to photos and videos.

The Palaiseau, France-headquartered Mipsology was founded in 2015 and its “flagship” Zebra AI software “will help accelerate AMD solutions for AI workloads,” according to a statement from the company.5

Zebra is software that customers can deploy on preexisting hardware, though Mipsology has experience tailoring and optimizing for AMD components. Potential use cases range from autonomous vehicles and manufacturing robotics to smart retail and responsive traffic lights.

AMD shares sank 5% Thursday morning.

-Vivian Medithi

Nvidia Stock Hits Record High After Posting Another Blowout Quarter

Shares of Nvidia Corp. (NVDA) rose 3% Thursday morning to trade around $484, an all-time high for the chipmaker after it beat second-quarter earnings estimates and offered a sales forecast surpassing Wall Street's high expectations.

The Santa Clara, Calif.-based chip company said its second-quarter revenue came in at a record $13.51 billion, up 101% year-on-year.6 Wall Street had high hopes for this year's stock darling but had earnings expectations pegged at $12.5 billion.7

Nvidia's data center business notched another record quarter, posting revenue of $10.32 billion, an astonishing 171% rise over the same period last year.

Net income of $6.18 billion, or $2.48 per share, marked an increase of more than 800% from last year. Nvidia returned $3.38 billion to shareholders via its stock buyback program during the quarter but announced $25 billion in additional repurchases.

With Thursday's gains, Nvidia shares have returned 222% year-to-date.

-Kevin George

Stocks Making the Biggest Moves Premarket

Gainers:

Splunk Inc. (SPLK): Shares of the software company soared 12% to their highest level in a year after it reported a narrower-than-expected loss of $0.38 a share.
Nvidia Corp. (NVDA): The chipmaker’s shares jumped more than 6% to an all-time high after blew past analyst estimates with its second-quarter earnings and third-quarter forecast.
Autodesk Inc. (ADSK): Shares climbed almost 7% after the software designer beat earnings and revenue estimates for the second quarter, citing healthy demand for its products amid a surge in infrastructure and construction spending.

Losers:

Petco Health and Wellness Co. (WOOF): Shares of the pet retailer tumbled 12% after it lowered its full-year earnings forecast, citing “a shift in consumer spending and pressures on our discretionary business.”
Boeing Co. (BA): Shares of the aerospace company lost 3% after it said a major contractor’s manufacturing error would delay deliveries of its 737 MAX aircraft. Shares of the contractor, Spirit AeroSystems (SPR) fell 8%.
Dollar Tree Inc. (DLTR): Shares of the discount store sank 7% after it said margins shrank in the second quarter, partially due to increased theft. The company also agreed to pay a $1.34 million settlement to the Occupational Safety and Health Administration (OSHA) as part of an agreement to improve its workplace safety practices.

5 Things to Know Before Markets Open

Here's what investors need to know to start their day:

Nvidia (NVDA) said that surging interest in artificial intelligence (AI)generated second-quarter sales of $13.5 billion, better than the company’s guidance of $11 billion, and leading Nvidia to forecast third-quarter sales of $16 billion, beating analyst estimates of $12.6 billion.
Shares of software company Splunk (SPLK) jumped 14% in pre-market trading after it reported narrower losses than anticipated at $0.38 a share compared to the $0.46 a share that analysts expected.
Boeing (BA) shares dropped 2% in pre-market trading after it found a quality problem from supplier Spirit AeroSystems (SPR) over improperly drilled holes for a part on its 737 MAX aircraft.
Shares of software maker Snowflake (SNOW) rose 3.6% in pre-market trading after it kept its outlook for full-year revenue steady at $2.6 billion, citing improved sales on AI and machine learning in its enterprise data operations.
Initial jobless claims for the week ending Aug. 19 were 230,000, a decrease of 10,000 from the prior week's revised level.