After the Federal Reserve released hawkish meeting minutes, U.S. stocks weakened across the board, with the three major indexes pressured downward by the end of the session, and large tech stocks generally closing down. Meanwhile, NVIDIA released strong earnings, causing its stock price to surge in after-hours trading, becoming the market's focus.
Market Decline Across the Board, Tech Stocks Mostly Down
In the early hours of May 29, Beijing time, the Federal Reserve released the minutes of its May monetary policy meeting. The minutes showed that officials expressed high uncertainty about the economic outlook and specifically mentioned concerns that tariff policies could boost inflation, emphasizing the need to maintain a "cautious" policy stance. As a result, market expectations for future rate cuts changed, and investor sentiment turned cautious.
By the close of trading, all three major U.S. stock indexes had fallen collectively, with the Dow Jones Industrial Average dropping more than 240 points, a decline of 0.58%; the Nasdaq Index fell 0.51%; and the S&P 500 Index fell 0.56%.
Large tech stocks performed poorly: Tesla fell 1.65%, Microsoft fell 0.72%, Amazon fell 0.63%, NVIDIA fell 0.51%, and Alphabet's Class A shares fell 0.31%. Only Apple and Meta saw slight increases, closing up 0.1% and 0.23%, respectively.
NVIDIA's Earnings Exceeded Expectations, Surged in After-Hours Trading
In the after-hours trading session, chip giant NVIDIA released its earnings report for the first quarter of fiscal 2026, showing results that far exceeded market expectations. This pushed the company's stock price to soar more than 6% in after-hours trading, with gains narrowing to about 4% at the time of writing.
According to the earnings report, in the first quarter ending April 27, 2025, NVIDIA achieved revenue of $44.1 billion, up 69% year-over-year, surpassing the market's expected $43.29 billion and exceeding its own estimated range of $42.14 billion to $43.86 billion.
The data center business, as a core growth driver, contributed $39.1 billion in revenue, a year-over-year surge of 73%, just slightly below the expected $39.22 billion. Non-GAAP adjusted earnings per share (EPS) were $0.81, increasing 33% year-over-year. Excluding costs related to H20 chips and tariff impacts, EPS reached $0.96, better than the expected $0.93.
In terms of gross margin, the first quarter's adjusted margin was 61%, down nearly 18 percentage points year-over-year. However, excluding H20 impacts, the gross margin was 71.3%, exceeding the expected 71%. NVIDIA's prior guidance was for a range of 70.5% to 71.5%.
Optimistic Outlook for Second Quarter, AI Business Continues to Thrive
Looking forward, NVIDIA also provided optimistic performance guidance. It expects revenue for the second quarter of fiscal 2026 to reach $45 billion, with a 2% fluctuation, translating to a range of $44.1 billion to $45.9 billion, slightly below the market's median expectation of $45.5 billion.
The gross margin is expected to be 72%, with a fluctuation of 50 basis points, equating to a range of 71.5% to 72.5%, higher than analysts' consensus forecast of 71.7%.
At the earnings release conference, NVIDIA CEO Jensen Huang announced that the Blackwell NVL72 AI supercomputing platform has entered full production. He stated that global demand for AI infrastructure is growing at an unprecedented pace, with AI inference token generation rising ninefold within a year. The future proliferation of AI agents will further drive a surge in computational demand.
