Wall Street moved lower on Thursday, as Nvidia shares fell despite posting strong quarterly earnings. The decline in the chip giant weighed on the broader semiconductor sector, while investors also monitored developments from U.S.-Iran nuclear talks.
At 14:13 ET (19:13 GMT), the S&P 500 dropped 0.6% to 6,902.54 points. The tech-heavy Nasdaq Composite fell 1.3% to 22,848.08 points, while the Dow Jones Industrial Average recovered earlier losses to trade roughly flat at 49,478.12 points.
The major indexes had closed higher in the previous session, supported by renewed optimism around artificial intelligence. However, Thursday’s session highlighted how elevated expectations remain for AI-linked stocks.
Nvidia stock falls despite strong earnings
Nvidia reported revenue and profit above expectations for the quarter ended in January. The company also issued stronger-than-forecast guidance for the current quarter, driven by continued demand for AI-focused chips.
Industry executives pointed out that ongoing investments by companies such as Alphabet and Meta reinforce the view that demand for AI computing infrastructure continues to expand. The growth of data centers and AI workloads remains a key structural driver for the semiconductor industry.
Despite these positive fundamentals, Nvidia shares dropped nearly 5%. Some investors expressed concern that the company was not returning enough capital to shareholders. Nvidia generated $35 billion in cash during the fourth quarter but returned only 12% to investors, compared with 52% a year earlier.
The stock’s decline also pressured other major chipmakers, including Broadcom and ASML.
Market strategists noted that Nvidia has surged more than 1,400% since its October 2022 low. With such gains already priced in, the threshold for a positive surprise has become much higher. In contrast, software stocks that had previously underperformed rebounded, reflecting a rotation in investor positioning.
Companies such as Atlassian and Workday were among the top percentage gainers on the Nasdaq. Meanwhile, Salesforce shares recovered from premarket losses even after issuing a fiscal 2027 revenue forecast below Wall Street expectations, signaling potential softness in enterprise software demand amid economic uncertainty.
U.S.-Iran nuclear talks conclude
Beyond corporate earnings, markets were also focused on geopolitics. U.S. and Iranian officials concluded a third round of nuclear discussions in Geneva. Mediator Oman described the talks as making “significant progress,” with further discussions expected after consultations in both capitals.
President Donald Trump warned that serious consequences could follow if negotiations fail to deliver meaningful progress. The United States has increased its military presence in the Middle East, raising concerns about potential escalation.
Any extended conflict could disrupt oil supplies from Iran, the third-largest crude producer within OPEC, adding another layer of uncertainty to global markets.
Oil prices hover near multi-month highs
Oil prices remained elevated amid geopolitical risks. Brent crude futures rose 0.4% to $70.96 per barrel, while U.S. West Texas Intermediate (WTI) crude edged down 0.1% to $65.38 per barrel.
Overall, Thursday’s market action reflected a mix of profit-taking in high-flying AI stocks and ongoing geopolitical uncertainty, keeping volatility elevated across global equities.
