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U.S. equity futures nudged higher in early Wednesday trading as investors braced for what could be one of the most important corporate events in years after the close of trading as AI chipmaker Nvidia publishes its highly-anticipated second quarter earnings.
Stocks have been tracking Nvidia’s (NVDA) progress, and rising in its extraordinary wake, for much of the past year as investors see the chipmaker as the key barometer for AI investment demand.
Nvidia stock, which has eased from its June record highs but has still added more than $1.22 trillion in value since late December, has driven around a third of the Nasdaq 100’s year-to-date gain of 18.4%
Options pricing suggests markets are keenly on edge for the group’s second quarter update, expected after the close of trading, and indicate a likely swing of around 9.8%, or $305 billion.
Nvidia earnings could trigger a $300 billion move in the stock, the largest post-reporting action in history.
That would be the largest implied volatility for Nvidia earnings in more than three years, and the largest single-day move on record in terms of market value.
Wall Street is hoping that Nvidia’s earnings, and the reading it will provide on AI demand heading into the back half of the year, will justify both is lofty $3.2 trillion valuation and the hundreds of billions in capital spending planned by tech giants such as Amazon (AMZN) , Google (GOOGL) , Meta Platforms (META) and Microsoft (MSFT) .
Related: Nvidia earnings key to market rally after Fed lays rate cards on table
And with the S&P 500 sitting just 0.77% from its July all-time peak, and the Federal Reserve set to begin a series of rate cuts over the coming months, starting in September, stocks are primed to either consolidate their hard-fought August gains or retreat into the autumn months as election uncertainty takes hold.
With the stakes rising to a crescendo, Wall Street is set for a cautious start to the trading session, with futures contracts tied to the S&P 500 suggesting a modest 5 point opening bell gain and those linked to the Nasdaq priced for a 20 point advance.
The Dow Jones Industrial Average, which notched its second-consecutive record close last night to take its year-to-date gain to around 9.4%, is called 25 points higher.
In the bond market, benchmark 2-year note yields slipped to 3.863% following a solid auction of $69 billion in new paper yesterday, with 10-year notes easing to 3.825% heading into the start of the New York trading session.
More Wall Street Analysts:
Analysts reboot Grand Theft Auto maker’s stock price targetAmerican Express stock analyst flags concerning shift in consumer behaviorAnalyst resets Nvidia stock price target before earnings
In Europe, the regional Stoxx 600 benchmark hit a one-month high of 520.91 earlier in the Frankfurt session, while Britain’s FTSE 100 was little-changed at 8,346.98 points.
Overnight in Asia, the Nikkei 225 ended 0.2% higher in Tokyo, while the region-wide MSCI ex-Japan benchmark edged 0.03% higher into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
