S&P500 Forecast: Financial Sector Strength Counters Tech Weakness in Volatile Trade

S&P 500 Edges Higher as Economic Stocks Offset Nvidia’s Decline

The S&P 500 advanced modestly on Thursday in a volatile session as investors favored stocks tied to economic growth, overshadowing mixed reactions to Nvidia’s earnings. Gains were supported by strength in financials, energy, and industrials, while technology saw mixed performance with Nvidia leading the turbulence.

At 16:58 GMT, the Dow Jones Industrial Average is trading 43782.86, up 374.39 or +0.86%. The S&P 500 Index is at 5928.79, up 11.68 or +0.20% and the Nasdaq-100 Index is trading 18878.48, down 87.66 or -0.46%.

Economic Recovery Plays Drive Broader Gains

Investors turned to stocks poised to benefit from economic acceleration. Financials climbed 1.32%, driven by JPMorgan and Goldman Sachs, while industrials gained 1.3% as Home Depot rallied. The Russell 2000 Index, representing smaller U.S. companies, outperformed with a gain exceeding 1%, reflecting optimism about broader economic momentum.

Meanwhile, the energy sector added 1%, buoyed by renewed interest in cyclical sectors as oil prices stabilized. Consumer staples also rose, up 0.87%, contrasting with a 0.97% decline in consumer discretionary stocks.

Nvidia Seesaws Post-Earnings

Nvidia shares fell around 1% despite reporting better-than-expected third-quarter earnings and providing strong guidance. The company posted adjusted earnings of 81 cents per share on $35.08 billion in revenue, surpassing consensus estimates. However, slowing sequential revenue growth tempered enthusiasm. Portfolio managers noted that Nvidia’s status as a growth and momentum favorite could face near-term headwinds if its performance fails to outpace the loftiest expectations.

In the broader tech sector, Alphabet dropped 6% for a second session amid antitrust concerns, while Snowflake surged 31% after exceeding earnings and revenue forecasts, marking its best day on record.

Jobless Claims Show Resilience Amid Economic Concerns

The labor market showed signs of resilience as weekly initial jobless claims fell to 213,000, below the consensus forecast of 220,000. However, continuing claims rose to 1.908 million, slightly exceeding expectations and potentially signaling emerging weakness. Additionally, the Philadelphia Fed manufacturing index turned negative, falling to -5.5 against expectations for a 6.9 reading, hinting at slowing regional activity.

Bitcoin and Crypto-Linked Stocks Rally

Bitcoin crossed the $98,000 threshold for the first time before settling near $96,566. Crypto-linked stocks like MicroStrategy (+11%) and Coinbase (+4%) also rallied. The optimism stemmed partly from speculation about favorable regulatory policies under a potential second Trump administration.

Market Forecast

The S&P 500 appears poised for cautious gains as economic recovery themes outweigh tech sector volatility. Key sectors like financials and industrials may continue to attract inflows, bolstered by improving labor market data and stabilizing commodity prices. However, investors should watch for potential headwinds in the technology sector as momentum-driven trades lose steam, with Nvidia and Alphabet under pressure. If macroeconomic signals weaken further, broader equity gains could face challenges.