S&P 500 gives up some gains as Nvidia slips, but GDP data keeps downside in check

Investing.com-- The S&P 500 gave up the bulk of gains Thursday as the Nvidia dragged tech lower, though data pointing to a stronger U.S. economy allayed recession fears, keeping downside momentum in check.

At 3:21 p.m. ET (1915 GMT), Dow Jones Industrial Average rose 311 points, or 0.8%, S&P 500 gained 0.1%, and NASDAQ Composite fell 0.1%.

GDP growth surprises to upside in Q2, easing hard landing fears

Gross domestic product grew by 3% in the last quarter, a Commerce Department report showed in its second estimate, better than expectations of a 2.8% growth and a jump from the 1.4% annualized growth seen in the first three months of the year.

Additionally, a Labor Department report showed initial claims for unemployment benefits for the week ending Aug. 24 stood at 231,000, marginally lower than economists' estimates of 232,000.

The fewer than expected weekly claims comes even as numerous corporates have announced job cuts. But while the risks to the labor market are increasing, "we doubt that claims are going to accelerate sharply any time soon," Jefferies said in a Thursday note.

Growing expectations of an interest rate cut in September have buoyed Wall Street indexes in recent sessions, with Federal Reserve chair Jerome Powell laying the foundations for a reduction at the Jackson Hole symposium last week.

Nvidia dips on soft outlook

Nvidia (NASDAQ:NVDA) fell more than 6% after the chipmaker disappointed with its guidance despite stronger-than-expected profit for the May-July quarter as well as a $50 billion share buyback.

Analysts on Wall Street remain bullish on the stock, however, citing that strong demand from cloud services providers for Nvidia AI chips including the new Blackwell chips set to be rolled out Q4.

"We believe it is still too early to start discounting a peak as major CSPs are still indicating to us demand upside and lengthening duration of capacity commitments from their customers - none of which suggests we are close yet to things rolling over," UBS said in a note.

Dollar General slumps, but Salesforce, Crowdstrike and Affirm shine on earnings stage

Dollar General (NYSE:DG) stock slumped 20% after the discount retailer cut its annual same-store sales forecast, with customers cutting back spending on its higher-margin goods.

Salesforce (NYSE:CRM) stock was flat after the business software maker reported robust fiscal second-quarter results that beat estimates and raised its full-year profit outlook.

CrowdStrike (NASDAQ:CRWD) stock rose 4% on the back of better-than-expected second-quarter results, even after the cybersecurity firm cut its revenue and profit forecasts in the aftermath of last month's global outage.

Some on Wall Street, however, believe upside is limited in the short-term for the stock because further clarity on fiscal 2026 growth trends are needed.

Affirm Holdings Inc (NASDAQ:AFRM), meanwhile, jumped 29% after reporting Q1 upbeat results following fiscal Q4 results that topped Wall Street estimates. The buy now pay later firm's guidance suggest that it is likely to turn an operating profit by the end of the fiscal year, RBC said in a note.

(Peter Nurse, Ambar Warrick contributed to this article.)

This article first appeared in Investing.com