US stocks saw choppy trading action on Tuesday as investors tread carefully on the eve of Nvidia's (NVDA) potentially market-moving earnings report.

The Dow Jones Industrial Average (^DJI) dropped about 0.2% by afternoon trading after the blue-chip benchmark eked out a record close to start the week. The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each hugged the flatline.

Stocks are struggling to find a footing as investors debate whether chipmaker Nvidia's high-stakes results on Wednesday can once again live up to elevated expectations. Semiconductor stocks lost ground on Tuesday alongside a 1% drop for the AI darling, a sign of how Nvidia's report could ripple through techs as it tests the AI trade that has driven gains.

At the same time, investors are counting down to a crucial update to the inflation gauge favored by the Federal Reserve. Chair Jerome Powell's clear message that an interest rate cut is imminent confirmed widespread confidence in a policy pivot in September. Friday's reading on the PCE price index could dent or cement bets on a 0.5% interest rate cut next month.

On the corporate front, Apple (AAPL) is replacing its long-standing CFO with an insider, Kevan Parekh, with just two weeks to go for its biggest product launch of the year. Meanwhile, the Paramount (PARA) takeover looks to be nearing an end, with Skydance Media set to seal a deal after media veteran Eric Bronfman dropped his bid.

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• Tue, August 27, 2024 at 1:38 PM CDT Josh Schafer
  

  Nvidia completed the dip just in time for its big earnings reveal

  Nvidia (NVDA) stock has had a wild third quarter.

  After falling about 30% amid a broader rotation out of tech stocks and growing concerns about delays for its new Blackwell chips, Nvidia is essentially back where it started the quarter.

  Trading around $130 a share, Nvidia is within 5% of its all-time closing high. And now that investors have already bought the dip, the looming question heading into a highly anticipated earnings release after the market close on Wednesday, is what Nvidia can say to keep investors excited.

  With Wall Street expecting earnings for the quarter grew nearly 109% and revenue soared almost 100% compared to the year prior, the bar is once again for the AI leader.

  “It needs to be a beat and raise [guidance] quarter because I think that’s sort of built into investor expectations,” Stifel applied technology analyst Ruben Roy told Yahoo Finance. “Certainly the discussions that we’re having with success suggest that there’s widely anticipated expectations for a beat for the July quarter earnings and then a sort of a beat on the guidance for the October quarter.”

• Tue, August 27, 2024 at 12:27 PM CDTAlexandra Canal
  

  Here comes Nvidia earnings report…

  AI juggernaut Nvidia (NVDA) will report second quarter earnings after the bell on Wednesday. The report has been branded as critical for the artificial intelligence trade and the tech sector at large.

  Nvidia’s announcement — the most anticipated results of the quarter — comes as the stock is up more than 163% year to date and 60% in the last six months. Rival AMD’s (AMD) stock price is up 9% year to date and down some 14% over the last six months.

  Intel (INTC) shares have collapsed 57% since the start of the year and are down 53% over the last six months as the company continues to struggle amid its massive turnaround effort.

  For the quarter, Nvidia is expected to report adjusted earnings per share (EPS) of $0.65 on revenue of $28.7 billion. That works out to a 139% jump in EPS and a 113% increase in revenue compared to the same period a year ago when Nvidia saw EPS of $0.27 and revenue of $13.5 billion.

  Nvidia is the world leader in AI chip design and software, controlling between 80% and 95% of the market, according to Reuters. And it’s expected to continue to hold that lead as it begins rolling out its next-generation Blackwell line of chips.

  And while The Information has reported about a potential delay in Blackwell shipments, analysts at firms including Goldman Sachs, KeyBanc, and Loop Capital don’t see that as much of a concern for Nvidia in the near term.

  “Our work suggests that while Blackwell is in fact delayed as we first wrote about on [Aug. 8], it could be more like 120 days vs 90 days … although it may not matter much as [1)] Hopper yields from TSMC continue to improve and [2)] The amount of increased Hopper production through the fall may outweigh the amount of Blackwell forgone by the push out,” Loop Capital managing director Ananda Baruah said in an investor note.

  For the quarter, Nvidia’s all-important data center business is expected to bring in $24 billion in revenue, a 142% increase from the $10.3 billion the segment saw in the same quarter last year. Wall Street is expecting Nvidia to not only beat its Q2 expectations but raise its guidance for Q3.

• Tue, August 27, 2024 at 11:45 AM CDTInes Ferré
  

  Super Micro stock falls after short seller Hindenburg Research calls company ‘serial recidivist’ in new report

  Super Micro Computer (SMCI) stock fell nearly 2% Tuesday following a report from short seller Hindenburg Research claiming, among other things, “accounting manipulation” at the AI high flyer.

  Hindenburg Research said its three-month investigation “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.” The firm disclosed Tuesday that it had taken a short position in Super Micro.

  Yahoo Finance reached out to Super Micro and had not heard back from the company at the time of publication.

  The maker of data center servers and management software captured the attention of investors this year as it rode the AI wave. The company buys components from AI chipmaker Nvidia (NVDA).

  Super Micro shares soared from $290 in early January to north of $1200 by March. The stock is off about 50% from its March peak but is still up 90% year to date. The company recently announced a 10-for-1 stock split effective Oct. 1.

  Read more here.

• Tue, August 27, 2024 at 11:00 AM CDTAlexandra Canal
  

  Sector action: Real estate pops while Energy lags

  Real estate (XLRE) led Tuesday’s sector action, with Utilities (XLU) and Consumers Staples (XLP) also outperforming. All three of those indexes moved more than 5% higher in mid-afternoon trading.

  The positive moves for the XLRE come after price increases moderated somewhat in June, according to the latest reading of the S&P CoreLogic Case-Shiller National Home Price Index.

  The index increased 0.2% month over month on a seasonally adjusted basis, less than the 0.3% rise seen in May. However, home prices remain at a record, with the index climbing for a fifth straight month to hit an all-time high in June.

  Energy, meanwhile, was the biggest laggard of the day after crude oil dropped about 2%, reversing previous gains. Oil had ripped 3% higher on Monday as production cuts in Libya, coupled with more tensions in the Middle East, added to supply concerns.

  (Source: Yahoo Finance)

• Tue, August 27, 2024 at 9:50 AM CDTAlexandra Canal
  

  Paramount stock falls after Bronfman exits bid process

  Paramount (PARA) stock fell over 5% early Tuesday after the company announced the official end of its “go-shop” period and billionaire Edgar Bronfman Jr. dropped out of the race to take over the media giant

  Paramount’s announcement all but confirms Skydance Media will be the next owner of the company, ending years of deal speculation surrounding the media giant controlled by Shari Redstone through her family’s holding company, National Amusements (NAI).

  “Having thoroughly explored actionable opportunities for Paramount over nearly eight months, our Special Committee continues to believe that the transaction we have agreed with Skydance delivers immediate value and the potential for continued participation in value creation in a rapidly evolving industry landscape,” Charles Phillips, chair of Paramount’s special committee, said in a statement.

  Bronfman, heir to the Seagram spirits fortune and current executive chairman at FuboTV (FUBO), submitted a last-minute bid earlier this month. At the time, the proposed $6 billion takeover of National Amusements threatened to derail the roughly $8 billion agreement the company reached with Skydance just one month prior.

  According to multiple reports, Bronfman had difficulty securing the financing for the deal, which included investors like Fortress and BC Partners Credit. This difficulty led to Bronfman’s early withdrawal from the bid process.

  “We continue to believe that Paramount Global is an extraordinary company, with an unrivaled collection of marquee brands, assets and people,” Bronfman said in a statement.

  The Skydance transaction is expected to close in the first half of 2025, subject to regulatory approval.

• Tue, August 27, 2024 at 9:05 AM CDT Josh Schafer
  

  Consumer confidence rises more than expected, despite weakening labor outlook

  Consumer confidence rose more than expected in August, despite a continued weak in consumers’ assessment of the labor market.

  The latest index reading from the Conference Board was 103.3, above the 101.9 seen in July and higher than the 100.7 economists surveyed by Bloomberg had expected.

  “Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, The Conference Board chief economist. “Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market.”

  Peterson added: “Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.”

  The report comes as recent economic data has shown softening in the labor market. In July, the unemployment rate hit 4.3%, its highest level in nearly three years. Meanwhile, the US labor market added 114,000 jobs, the second-lowest monthly total since 2020.

  In August’s consumer confidence report, 32.8% of people said jobs were “plentiful,” down from 33.4% in July. Meanwhile, 16.4% said jobs were “hard to get,” up slightly from 16.3%.

• Tue, August 27, 2024 at 8:33 AM CDTAlexandra Canal
  

  Stocks edge lower at opening bell

  US stocks moved lower on Tuesday after the Dow hit an all-time high the day prior.

  The Dow Jones Industrial Average (^DJI) fell roughly 0.2%. The benchmark S&P 500 (^GSPC) also edged about 0.2% lower while the tech-heavy Nasdaq Composite (^IXIC) dropped roughly 0.3% on the heels of closing losses for both gauges.