Market Analysis

U.S. futures barely moved as Nvidia's earnings were watched

Amos Simanungkalit · 28 Aug13.5K Views

U.S. stock index futures showed minimal movement on Wednesday as investors awaited Nvidia's earnings report after the market close, which is anticipated to provide further insights into the AI sector.

This week has seen a rotation away from technology stocks, driven by increasing expectations that the Federal Reserve may lower interest rates in September. This shift has supported inflows into more economically sensitive sectors, contributing to record highs for Wall Street indexes.

S&P 500 Futures were steady at 5,649.50 points, Nasdaq 100 Futures edged up by 0.1% to 19,678.25 points by 05:41 ET (09:41 GMT), and Dow Jones Futures remained unchanged at 41,357.0 points.

Nvidia Earnings to Offer Insights on AI NVIDIA Corporation (NASDAQ: NVDA), the leading chipmaker globally, is set to release its second-quarter earnings after the bell. The company is projected to report earnings per share of $0.644 on revenues of $28.68 billion, reflecting an increase from the previous quarter.

Nvidia’s shares have experienced a slight decline in after-hours trading but have surged nearly 160% so far in 2024, driven by rising investment in artificial intelligence. The company is known for producing the most advanced AI chips and is viewed as a key indicator of AI demand.

Nvidia’s earnings report follows recent updates from other major tech companies, which suggested that AI may not be the significant earnings driver initially anticipated, leading to notable declines in tech valuations over the past month.

Wall Street Reaches Record Highs Fueled by Rate Cut Expectations Despite some uncertainty surrounding Nvidia and a sector rotation away from technology, Wall Street indexes reached record highs on Tuesday, supported by expectations of lower interest rates. Fed officials have recently adopted a more dovish stance, bolstering these expectations.

The S&P 500 increased by 0.2% to close at a record high of 5,625.80 points, while the Dow Jones Industrial Average climbed to a record peak of 41,250.50 points. The NASDAQ Composite rose by 0.2% to 17,755.58 points but remained below its recent highs.

Investors are nearly unanimous in expecting an interest rate cut in September, though there is division over whether the reduction will be 25 or 50 basis points, according to CME Fedwatch data.

Later this week, the PCE price index, the Fed’s preferred measure of inflation, is expected to offer additional clues about a potential rate cut. Additionally, jobless claims data due on Thursday could influence expectations, particularly amid growing concerns about a more rapid cooling of the labor market than anticipated.