Market Highlights: Dow Jones breaks another record as focus turns to Nvidia’s big night

ASX to open lower despite the Dow Jones hitting a new high
Nvidia’s earnings report will be the major event later tonight
Apple’s stock rose with the appointment of a new CFO

The ASX is expected to open lower on Wednesday despite the Dow Jones hitting yet another record high. At 8am AEST, the SPI ASX200 futures contract was pointing down by 0.4%.

Overnight, the blue chips Dow Jones lifted by 0.02% , while the S&P 500 and the tech heavy Nasdaq each rose by 0.16%.

Stocks remained close to their peak levels as investors anticipate Nvidia Corp’s earnings report later tonight for insights into whether the AI trade driving the current bull market can be sustained.

Goldman Sachs has previously referred to Nvidia as “the most crucial stock in the world”, as the stock has contributed to more than a third of the Nasdaq 100’s increase this year.

“Nvidia’s earnings report may actually have more impact on the overall market than Jerome Powell’s Jackson Hole speech last week,” Anthony Saglimbene at Ameriprise Financial told Bloomberg.

Kevin Mahn of Hennion & Walsh added,”I think Nvidia is positioning themselves to be the hub of the AI ecosystem in a similar fashion that Amazon became the hub of the e-commerce ecosystem.”

Elsewhere, Meta fell 0.4% after CEO Mark Zuckerberg claimed that Facebook faced “pressure” from the US government to restrict content about Covid-19 during the pandemic, and expressed regret over the company’s choice to comply with those demands.

Apple‘s stock rose after the company announced it will appoint Kevan Parekh, an internal candidate, as its new CFO, just two weeks before its major product launch of the year.

Eli Lilly & Co. also rose slightly after saying that it was now offering its popular weight-loss drug Zepbound to patients for as low as US$399 a month, as it addresses issues with supply shortages.

On the economic front, data last night revealed that US consumer confidence reached its highest level in six months in August, driven by more positive perceptions of the economy and inflation.

Back home, the CPI report for July will be released at 11:30 am AEST today.

And the ASX earnings season continues with Flight Centre, Tabcorp, and Woolworths among the companies set to release their results.

What to expect from Nvidia tonight

Nvidia is expected to exceed its previous earnings results when it reports on Wednesday, according to Nigel Green, CEO of deVere Group.

Green calls this the “single most important earnings report of the year” due to Nvidia’s remarkable performance, with its stock up 150% this year and 3,000% over the past five years.

He emphasised Nvidia’s dominance in AI chips, noting that its advanced GPUs are driving high demand with no strong competitors in sight.

Despite concerns about shipment delays and comparisons to the dot-com bubble, Green remains optimistic.

He cites strong AI demand reported by other tech companies such as Taiwan Semiconductor, AMD, and Super Micro Computer, as well as increased spending by Nvidia’s key customer, Meta Platforms, as evidence of Nvidia’s potential for a blockbuster earnings report.

“Nvidia’s upcoming earnings report will be a crucial test for the broader market’s AI-driven rally, but the signs point toward another strong showing,” Green said.

“Expect Nvidia to not only meet but exceed expectations this week.”

In other markets …

Gold price rose by 0.4% to US$2,525 an ounce.

Oil prices dropped by 2%, with Brent crude now trading at US$79.78 a barrel.

The benchmark 10-year US Treasury yield climbed by 1 basis point (bond prices lower) to 3.83%.

The Aussie dollar rose by 0.3% to US67.94 cents.

Bitcoin meanwhile dropped by 6% in the last 24 hours to US$59,162 and Ethereum tumbled by 9% to US$2,445.

5 ASX small caps to watch today

Mach7 Technologies (ASX:M7T)
Medical imaging software provider, Mach7, has reported strong results for FY24, achieving its guidance for sales orders, revenue, and cashflow. The company secured record sales orders of $61.3 million, up 52% from FY23. ARR (annual recurring revenue) grew by 29% to $22 million. Total revenue was $29.1 million, a slight drop of 3%, but still met guidance. The company ended the year with $26.2 million in cash. CEO Mike Lampron said plans for FY25 include focusing on new customer acquisition and investing in technology.

Desert Metals (ASX:DM1)
DM1 has reported high-grade gold results from drilling at the Podio prospect on the Tengrela South permit in Côte d’Ivoire. Key intercepts include 13 metres at 1.85 g/t gold, with 1 metre at 13.34 g/t, and 3 metres at 6.19 g/t, with 1 metre at 17.49 g/t. Out of 14 reverse circulation drill holes completed, 11 intersected significant gold mineralisation. The drilling has confirmed that gold mineralisation is consistent and extends the high-grade results previously found by Perseus Mining. DM1 plans to estimate a Mineral Resource for Podio, located near Perseus’s Sissingué gold mine and Aurum Resources’ Boundiali Project. Geophysics, sampling, and drilling at Adzope are scheduled to start in September.

Pantera Minerals (ASX:PFE)
PFE is set to begin producing lithium brine from the Smackover Formation in the USA. The company will use a Smackover production well and a disposal well, which may also become the site for a pilot plant using Direct Lithium Extraction (DLE) technology. Work will start soon, and the re-entry well will provide brine samples for testing lithium content and the DLE process. Pantera holds the largest listed acreage outside major companies such as Exxon and Albemarle.

Critical Resources (ASX:CRR)
Desktop studies will soon begin at the Hillgrove South Prospect in the Halls Peak Project, located 6km southeast of Larvotto Resources’ Hillgrove deposit in NSW. This area is strategically important due to its proximity to a major antimony and gold deposit. Critical aims to identify high-priority targets to leverage its position in the New England Fold Belt. Recent Chinese export restrictions on antimony add to the asset’s strategic value. The Hillgrove South Prospect shares geological features with the Hillgrove deposit, enhancing its discovery potential.

Sovereign Metals (ASX:SVM)
Sovereign has begun a hydraulic mining trial at the Kasiya Pilot Site in Malawi, following a successful dry mining trial in July. Conducted by Fraser Alexander, the trial will last about three months and includes backfilling, deposition, and rehabilitation tests. The soft, friable nature of the Kasiya orebody is expected to be suitable for hydraulic mining. The trial is overseen by the Sovereign-Rio Tinto Technical Committee. Rio Tinto has increased its shareholding in Sovereign to 19.9% with an additional investment of $0.7 million.

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