Global equities saw modest gains as investors await a critical earnings report from Nvidia Corp., a leading player in the $3 trillion artificial intelligence sector. Nvidia’s performance is closely watched as a key indicator of AI-related spending across the technology industry. Analysts anticipate a revenue growth of over 70% for the current quarter, making any potential shortfall highly impactful due to the company’s significant role in U.S. indexes.
Nvidia’s stock has surged approximately 160% this year, significantly outperforming the Nasdaq 100’s 16.4% gain. The options market suggests a potential swing of nearly 10% in either direction following the earnings release.
Futures for the Nasdaq and S&P 500 rose by about 0.1%, while Europe’s Stoxx 600 increased by 0.3%.
Justin Onuekwusi, Chief Investment Officer at St James’s Place, likened Nvidia’s upcoming report to major macroeconomic events such as payrolls and CPI releases, noting that any slight disappointment could trigger substantial market volatility due to the significant money and leverage involved in these high-profile stocks.
The Nvidia earnings report is particularly crucial amid ongoing market concerns about a potential U.S. recession and the Federal Reserve’s ability to cut interest rates swiftly enough to achieve a soft landing. Money markets are currently pricing in approximately 100 basis points of rate cuts this year, starting in September.
The U.S. dollar rose about 0.2% against a basket of currencies on Wednesday but remains on track for its largest monthly decline of the year due to expectations of rate cuts. U.S. Treasury yields remained relatively stable.
The yen continued to decline against the dollar following comments from Bank of Japan Deputy Governor Ryozo Himino, who indicated that while the BOJ plans to raise interest rates in line with its inflation targets, it will proceed with “utmost vigilance.
In stock-specific news, Nordstrom Inc. saw a 6% rise in premarket trading after the department store chain provided a stronger-than-expected adjusted earnings-per-share outlook. Conversely, Super Micro Computer Inc. shares fell after Hindenburg Research announced it had taken a short position against the server equipment maker.
In Europe, GSK Plc gained following the Delaware Supreme Court’s decision to review a lower state court ruling related to litigation over the company’s Zantac heartburn medication.
Related topics: