Stock Market Pauses... Nvidia Rises in After-Hours on Strong Earnings [New York Stock Market Briefing]

The three major indices of the New York Stock Exchange showed weakness. During the session, caution increased ahead of Nvidia's first-quarter earnings announcement, and fatigue from the previous day's surge also weighed on investor sentiment. However, after the market closed, Nvidia reported strong earnings, leading to a rise in after-hours trading.

On the 28th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,098.7, down 244.95 points (0.58%) from the previous session. The Standard & Poor's (S&P) 500 index fell 32.99 points (0.56%) to 5,888.55, and the Nasdaq Composite Index dropped 98.23 points (0.51%) to close at 19,100.92.

The main focus of the market that day was Nvidia's first-quarter earnings. Since Nvidia's earnings were to be released after the market closed, investors responded with caution, leading to a selling bias.

Nvidia's first-quarter earnings, released after the market closed, slightly exceeded market expectations. The quarterly earnings per share (EPS) was $0.96, and revenue was $44.1 billion. Both figures slightly exceeded market expectations.

Following this news, Nvidia's stock rose by more than 4% in after-hours trading. Although it did not significantly exceed expectations, the general assessment is that Nvidia performed well despite the Trump administration's export sanctions against China.

During the session, there were also foreign media reports that U.S. President Donald Trump had issued an executive order preventing semiconductor design companies from selling products to China. This news was said to have suppressed investor sentiment in semiconductor stocks and the stock market overall, according to some securities firms.

Meanwhile, the Federal Reserve's (Fed) Federal Open Market Committee (FOMC) minutes from May highlighted the increased focus on stagflation risks, which also spurred risk aversion.

According to the minutes, FOMC members expressed stronger caution about stagflation risks than before. It was also confirmed that Fed staff submitted an economic outlook that seemed to weigh more on the possibility of a recession.

Members expressed concern that "if inflation proves to be more persistent while growth and employment forecasts weaken, the committee may face difficult trade-offs."

Fed staff judged that "the risks to real activity are tilted to the downside" and assessed that "the likelihood of entering a recession is almost as high as the baseline forecast."

Among individual stocks, U.S. apparel company Abercrombie & Fitch saw its stock surge 14% on better-than-expected first-quarter earnings. In pre-market trading, the stock's rise expanded to 27%.

U.S. department store chain Macy's recorded a slight decline after lowering its adjusted EPS forecast for the year.

Shin Min-kyung, Hankyung.com reporter radio@hankyung.com