[New York Stock Market] Salesforce Decline and GDP Slowdown Lead to Drop... Nvidia Down 3%

The three major indices of the U.S. New York stock market all showed a decline on the 30th (local time). This was due to a series of disappointing earnings and guidance from companies including Salesforce and Kohl's, as well as a slowdown in the revised U.S. first-quarter gross domestic product (GDP) growth rate, which dampened investor sentiment.

[Image source= Xinhua News Agency]

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 38,111.48, down 330.06 points (0.86%) from the previous trading day. The S&P 500, centered on large-cap stocks, fell 31.47 points (0.60%) to 5,235.48, and the Nasdaq, focused on tech stocks, closed at 16,737.08, down 183.50 points (1.08%). The Dow showed losses for three consecutive trading days, while the S&P 500 and Nasdaq declined for two consecutive days.

Salesforce, the world's leading customer relationship management (CRM) software company by global market share, dragged the indices down with its stock falling the most since 2008. Salesforce's shares plunged more than 19% following its first-quarter earnings announcement, which fell short of market expectations. Department store chain Kohl's, operating over 1,170 stores nationwide, also saw its stock plunge over 22% due to unexpectedly poor results.

Nvidia shares, which had risen for four consecutive trading days, fell by over 3% on this day. This followed news late in the session that U.S. authorities were delaying the issuance of licenses for large-scale shipments of artificial intelligence (AI) accelerators to the Middle East by chip manufacturers such as Nvidia and Advanced Micro Devices (AMD) for national interest reasons. However, AMD shares rose slightly by 0.9%. Amazon.com fell by over 1%, Alphabet (Google's parent company) dropped by over 2%, Microsoft (MS) declined by over 3%, and Meta Platforms (Facebook's parent company) fell by over 1%.

The slowdown in U.S. economic indicators also dampened investor sentiment. The seasonally adjusted revised real GDP for the first quarter increased at an annual rate of 1.3% compared to the previous quarter. This was a slowdown compared to the preliminary estimate of 1.6% growth announced last month. Although it was higher than the market consensus of 1.2% growth compiled by The Wall Street Journal (WSJ), it was significantly lower than the confirmed 3.4% growth rate for the fourth quarter of last year.

According to the U.S. Department of Labor, the number of new unemployment insurance claims for the week ending on the 25th was 219,000, an increase of 3,000 from the previous week.

Market participants are closely watching the April Personal Consumption Expenditures (PCE) price index to be released on the 31st. The key issue is whether the core PCE, the Federal Reserve's (Fed) preferred inflation gauge, will show signs of slowing. Wall Street expects the April core PCE inflation rate to remain around 2.8%, similar to the previous month.

On the same day, John Williams, President of the Federal Reserve Bank of New York, said, "The U.S. economy is moving toward a better balance point, and inflation pressures are easing globally as other countries also experience slowing inflation rates." He added, "I expect inflation to ease again in the second half of this year."

According to the Chicago Mercantile Exchange (CME) FedWatch, the financial market currently reflects a more than 50% chance that the Fed will cut interest rates by at least 0.25 percentage points by September. The probability of keeping rates steady at the current 5.25-5.5% level during the June and July meetings was as high as 87%.

Oil prices continued their decline for the second consecutive trading day. On the New York Mercantile Exchange, the near-month July delivery West Texas Intermediate (WTI) crude oil closed at $77.91 per barrel, down $1.32 (1.67%) from the previous day. This was the largest single-day drop since May 22.