Why The Dow Is Beating The NASDAQ And S&P 500 Today

The stock market is drooping again, giving back most of the gains seen on Wednesday. The three leading market indexes are down, and you can tell from the market action that chip giant Nvidia (NVDA 5.55%) is leading the downturn.

As of 1:20 p.m. ET, the Nasdaq Composite (^IXIC 1.21%) index dropped 1.9% lower while the S&P 500 (^GSPC 0.57%) fell 1.1%. The Dow Jones Industrial Average (^DJI +0.08%), on the other hand, only slipped 0.4% lower:

^SPX data by YCharts

Wall Street wanted more from Nvidia

The market driver today isn’t the American economy. Nvidia reported earnings last night, and this report set the mood for the entire market.

That may sound backwards. After all, Nvidia beat Wall Street’s estimates across the board. It’s hard to complain about a quarter with $68.1 billion in sales and $43.00 billion of unadjusted earnings, but management included a few servings of bear food in their commentary.

Hyperscaler sales are still growing, but slower than Nvidia’s orders from smaller customers. Devoted Nvidia fans can think of this shift as diversification, while skeptics see the hyperscaler bonanza losing some pep.

Why the Dow is holding up better

Nvidia’s stock jumped a couple of percent higher right after the report, but backed into negative territory later on. By now, it’s down by 5%. With a $4.5 trillion market cap, Nvidia represents a larger portion of the S&P 500 and Nasdaq than any other stock. After a 10-for-1 stock split in the summer of 2024, its $191 share price only gives it a 2.4% weighting in the price-weighted Dow.

On that list, 13 stocks rose today while 17 fell, and the largest impacts came from Caterpillar (CAT 1.84%) dropping by 2.4% and Goldman Sachs (GS +0.80%) gaining 2.8%. Their stock prices are several times higher than Nvidia’s at $768 and $902, respectively, which amplifies their effect on the Dow index.