Investors await earnings from $3T Nvidia, stocks edge higher

Global equities edged higher ahead of a key earnings release from Nvidia Corp., the $3 trillion stock at the forefront of the global artificial intelligence frenzy. 

Seen as a barometer for AI spending across much of the technology industry, Nvidia is expected to project revenue growth of more than 70% for the current quarter. Any disappointment is certain to roil markets, given the company’s heft in US indexes. 

The stock has rallied about 160% this year, far outpacing the Nasdaq 100’s 16.4% gain, with the options market implying a move of nearly 10% in either direction on the day after the results. 

Futures on the Nasdaq and the S&P 500 traded about 0.1% higher, while Europe’s Stoxx 600 rose 0.3%.

“The Nvidia result has become very much like a macro event, in some ways as big as the payrolls and CPI releases in terms of market impact,” said Justin Onuekwusi, chief investment officer at wealth manager St James Place. “There’s a lot of money, a lot of leverage in these consensus names and it will take only a slight disappointment to cause significant volatility in markets.”

The Nvidia report and earnings guidance are seen as crucial at a time when markets are grappling with the possibility of a US recession and whether the Federal Reserve can cut interest rates fast enough to engineer a soft landing. Money markets currently price about 100 basis points worth of interest rate cuts this year, starting September. 

While the dollar rose about 0.2% against a basket of currencies on Wednesday, it’s still on track for its steepest monthly decline this year, undermined by rate-cut bets. US Treasury yields were little changed.

The yen extended losses against the dollar following comments from Bank of Japan’s Deputy Governor Ryozo Himino, who said that while the BOJ will raise interest rates as long as inflation moves in line with the bank’s view, it must monitor developments with “utmost vigilance.” 

Among individual stock movers, Nordstrom Inc. rose 6% in US premarket trading after the department-store chain issued a stronger-than-expected adjusted earnings-per-share outlook. Super Micro Computer Inc. shares slipped, after the shares fell Tuesday on the back of a Hindenburg Research announcement that it’s short the maker of server equipment. 

In Europe, GSK Plc gained after the Delaware Supreme Court decided to review a lower state court decision related to litigation over the firm’s Zantac heartburn medication. 

Bitcoin fell below the $60,000 level as part of a broad crypto market retreat that included a sharp drop in second-largest token Ether. In commodity markets, gold retreated after a three-day advance that took it closer to its all-time high.

Key events this week:

• Nvidia earnings, Wednesday
• Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
• Eurozone consumer confidence, Thursday
• US GDP, initial jobless claims, Thursday
• Fed’s Raphael Bostic speaks, Thursday
• Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
• Eurozone CPI, unemployment, Friday
• US personal income, spending, PCE; consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.3% as of 9:59 a.m. London time
• S&P 500 futures were little changed
• Nasdaq 100 futures rose 0.1%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index rose 0.2%
• The MSCI Emerging Markets Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.4% to $1.1141
• The Japanese yen fell 0.3% to 144.35 per dollar
• The offshore yuan was little changed at 7.1265 per dollar
• The British pound fell 0.2% to $1.3230

Cryptocurrencies

• Bitcoin fell 4.2% to $59,249.35
• Ether fell 4.5% to $2,464.14

Bonds

• The yield on 10-year Treasuries was little changed at 3.83%
• Germany’s 10-year yield declined three basis points to 2.26%
• Britain’s 10-year yield was little changed at 3.99%

Commodities

• Brent crude fell 0.8% to $78.92 a barrel
• Spot gold fell 0.7% to $2,508.17 an ounce

This story was produced with the assistance of Bloomberg Automation.