Wall Street Holds Its Breath Ahead of Nvidia Earnings

Market Overview

The US stock market is poised for a significant session as investors await Nvidia's financial results, which are set to be released after the market closes. This event is considered pivotal, marking the conclusion of the earnings season for major companies. Nvidia's fiscal calendar is slightly misaligned with its peers, adding to the anticipation.

Market Sentiment

Futures for US indices indicate a positive opening, with the US500 up by 0.5% and the US100 gaining over 1%. Despite ongoing concerns regarding international trade and geopolitical tensions, particularly with Iran, the market's focus remains on Nvidia's performance. Companies closely associated with Nvidia, such as TSMC and ASML, are trading at historical highs, while those utilizing Nvidia's technology, like Microsoft, have shown weaker performance.

Nvidia's Expected Performance

Nvidia is projected to report a revenue growth of approximately 68%, an acceleration compared to previous quarters. While the company's trailing P/E ratio suggests it may be overvalued, the forward P/E indicates a more reasonable valuation. The share price is currently consolidating, and analysts believe that Nvidia must exceed market expectations and provide a strong outlook to maintain investor confidence.

Technical Analysis

The US500 has recently outperformed the US100, driven by a shift towards defensive stocks. However, technology shares are leading the market today, with Nvidia breaking out of its consolidation phase. If Nvidia delivers strong results, the US500 could potentially reach 7,000 points, while the US100 may approach 26,000 points.

Corporate News Highlights

• Nvidia (NVDA.US): Shares are up 0.7% as the market anticipates not only an earnings beat but also optimistic guidance regarding demand for Blackwell chips. This earnings report is seen as crucial for the continuation of the AI bull market.
• Lithium Sector: Reports of Zimbabwe suspending exports of lithium concentrates have positively impacted lithium producers, with shares of Albemarle and SQM rising significantly.
• Big Tech Sentiment: Most of the "Magnificent Seven" tech stocks are trading higher, with Microsoft, Amazon, and Meta showing gains, while Apple continues to lag behind.
• Broader Market Gains: Companies like Cava, HP, and Lowe’s are also seeing positive responses from investors, indicating a search for opportunities beyond the AI sector.