The overall market sentiment took a positive turn on Thursday, as the CNN Money Fear and Greed index moved into the “Greed” zone. This shift in sentiment coincided with the Dow Jones Industrial Average reaching a new record high during the trading session.
Despite the positive market trend, shares of Nvidia Corporation (NVDA) experienced a decline of around 6.4%. This decline weighed on the S&P 500 and the Nasdaq. The drop came despite Nvidia reporting better-than-expected earnings and sales results for the second quarter on Wednesday. The company also issued strong third-quarter revenue guidance and announced an additional $50 billion stock repurchase authorization. However, the decline in Nvidia’s stock price was attributed to a contraction in the company’s gross margin from the first quarter.
Meanwhile, economic data released on Thursday painted a positive picture of the US economy. Initial jobless claims fell by 2,000 from the prior week to 231,000 in the period ending August 24. This suggests a continued strong labor market. The US real gross domestic product expanded at an annual rate of 3.0% in the second quarter, up from 1.4% in the first quarter, indicating sustained economic growth. Additionally, US wholesale inventories rose by 0.3% month-over-month to $905 billion in July, further supporting the positive economic outlook.
Most sectors on the S&P 500 closed on a positive note, with energy, financials, and industrials stocks experiencing the most significant gains. However, information technology and consumer staples stocks bucked the overall market trend, closing the session lower.
The Dow Jones closed higher by around 244 points to 41,335.05 on Thursday. The S&P 500 fell 0.01% to 5,591.96, while the Nasdaq Composite dipped 0.23% to close at 17,516.43 during Thursday’s session.
Investors are currently awaiting earnings results from JinkoSolar Holding Co., Ltd. (JKS), MINISO Group Holding Limited (MNSO), and Frontline plc (FRO).
Understanding the CNN Business Fear & Greed Index
The CNN Money Fear & Greed Index, which currently stands at 57.7, measures market sentiment. The index is based on the principle that higher fear exerts downward pressure on stock prices, while higher greed has the opposite effect. Calculated using seven equally weighted indicators, the index ranges from 0 to 100. A reading of 0 indicates maximum fear, while 100 signals maximum greediness.
