Shares rise ahead of Nvidia earnings release

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Another Dow record
Stocks rose slightly ahead of the release of Nvidia’s earnings report. The Dow Jones Industrial Average added 0.02%, marking a second straight record close. The S&P 500 and Nasdaq Composite both rose 0.16%. Nvidia shares climbed 1.5% as investors await the chip giant’s earnings release expected on Wednesday. Meanwhile, the yield on the 10-year U.S. Treasury note edged up, while U.S. oil prices fell 2.2% on hopes that the production halt in Libya would be temporary.

“Most important share”
Nvidia has been volatile lately. The AI ​​chipmaker’s market cap has increased ninefold since 2022, briefly becoming the world’s most valuable publicly traded company. But shortly after, the stock fell nearly 30% in seven weeks, losing $800 billion in value. The stock has since rebounded and is now just 7% below its all-time high. With quarterly earnings due on Wednesday, Wall Street is focused on Nvidia’s performance as it could impact the broader market. “It’s the most important stock in the world right now,” EMJ Capital’s Eric Jackson told CNBC. “If they lay an egg, that would be a big problem for the entire market. I think they’ll surprise on the upside.” CNBC’s Kif Leswing takes a look at what to expect from Nvidia’s earnings.

Lose weight at a bargain price
Eli Lilly has unveiled a new, cheaper version of its weight-loss drug Zepbound aimed at patients without health insurance, including Medicare patients. The 2.5- and 5-milligram single-dose vials cost $399 and $549 per month, respectively, about half the usual list price. Eli Lilly hopes to expand access, increase supply and ensure patients are getting real treatments amid rising demand and copycat versions. The initiative addresses affordability issues with popular GLP-1 weight-loss drugs, which typically cost about $1,000 a month before insurance coverage.

Censored
Meta CEO Mark Zuckerberg claims the Biden administration pressured the company to censor Covid-19 content on Facebook in 2021. In a letter to the House Judiciary Committee, Zuckerberg stated: “For months in 2021, senior Biden administration officials, including the White House, repeatedly pressured our teams to censor certain COVID-19 content, including humor and satire, and expressed much frustration with our teams when we did not agree.” Zuckerberg expressed regret for some decisions made in response to government requests.

Nordstrom rises
Nordstrom shares rose more than 7% in extended trading after the retailer reported earnings that beat Wall Street expectations. The retailer reported adjusted earnings of 96 cents per share, above analyst estimates, on revenue of $3.89 billion, up 3.4% from a year earlier. Despite the earnings beat, Nordstrom gave cautious full-year guidance, expecting adjusted earnings per share between $1.75 and $2.05 and revenue between a decline and growth of 1%.

(PRO) Dividend stocks on the rise
As expectations grow for a Federal Reserve rate cut in September, dividend-paying stocks are likely to attract investors’ attention. Here’s how to pick promising dividend stocks.

While the S&P 500 is just shy of its record high, the PHLX Semiconductor Index is still more than 14% below its all-time high, with many of its components in bear markets. As CNBC’s Fred Imbert writes, this has many investors questioning the sustainability of the recent rally.

Nvidia has been a key driver of the market rally this year. Despite a recent decline, its share price rose 160%. As the second most valuable U.S. stock, investors are eagerly awaiting the earnings report to see if the company can maintain momentum in the AI ​​space. However, with the stock trading at 37 times forward earnings – above the average S&P 500 technology index – there are concerns about whether Nvidia can meet high expectations, especially regarding future guidance.

“Let’s go back to the middle of the year. The S&P rose 15%, with Nvidia accounting for five percentage points of that gain alone,” Scott Chronert, Citi’s U.S. equity strategist, told CNBC. “From a fundamental index weighting perspective, there is no doubt about Nvidia’s importance.” However, the market must continue to see signs that the tailwind for AI productivity gains is taking hold, Chronert said, stressing that future direction will be critical.

Joseph Moore, a semiconductor industry analyst at Morgan Stanley, acknowledged that while rivals such as AMD, Broadcom and Marvell are viable alternatives, Nvidia remains in a strong position. “We expect them to at least maintain their market share in 2025… These numbers have gotten so big so quickly, I think that’s the bigger risk,” Moore told CNBC. He expects Nvidia to maintain its 90% market share in AI processors.

Ahead of the earnings, Truist Securities analyst William Stein raised his price target for Nvidia. CNBC’s Pia Singh explains why. And CNBC’s Kif Leswing takes a look at the expected earnings.

The broader technology landscape is also under scrutiny this week, with earnings from Dell and Salesforce another factor. August saw a sell-off in the technology sector, but dovish comments from Federal Reserve Chairman Jerome Powell helped partially reverse that downturn.

However, Nomura analyst Naka Matsuzawa warns that stronger-than-expected earnings from the technology sector could call into question the current market valuation of the interest rate cuts.

“This week, earnings reports from U.S. technology companies will be in focus, and as the risk of a collapse in technology stocks subsides, some of this pricing in of rate cuts could be reversed,” he wrote in a note on Monday.

— CNBC’s Lisa Kailai Han, Brian Evans, Fred Imbert, Arjun Kharpal, Kif Leswing, Annika Kim Constantino, Gabrielle Fonrouge, Pia Singh and Spencer Kimball contributed to this report.