US stocks recovered from steeper losses on Thursday but still broadly fell as Nvidia's (NVDA) stellar earnings failed to wow investors and left Wall Street juggling growing worries over AI's potential for payoff and disruption.
The tech-exposed Nasdaq Composite (^IXIC) lost 1.2%. The S&P 500 (^GSPC) fell about 0.6%, while the Dow Jones Industrial Average (^DJI) rose above the flat line, following solid wins for stocks more broadly on Wednesday.
Nvidia shares fell over 5% as the chip giant received a lukewarm response from investors despite big beats on quarterly revenue and profit and guidance that also came in above expectations.
A lack of detail on drivers for the outlook — which doesn't include potential revenue out of China — left some on Wall Street asking questions about competitive threats and the staying power of AI buildout demand.
Fears of an AI bubble and the "AI scare trade" have buffeted stocks in recent weeks, with the technology's challenge to sectors such as legacy software coming to the fore. Salesforce (CRM) shares turned higher as CEO Marc Benioff tried to defuse sell-off worries after its revenue forecast fell short of estimates.
Elsewhere in earnings, Big Three automaker Stellantis (STLA) posted a massive $26 billion full-year loss after an EV-related charge. Warner Bros. Discovery (WBD), Dell (DELL), and CoreWeave (CRWV) highlight Thursday's docket.
On the macro front, initial jobless claims ticked up marginally, signaling a somewhat stagnated economy as investors wait for the January wholesale inflation reading on Friday to help evaluate the odds of an interest-rate cut.
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