Stocks Rise as Nvidia Countdown Begins: Markets Wrap

(Bloomberg) — Global stocks rose slightly ahead of a key earnings release from Nvidia Corp., the $3 trillion company at the forefront of the global artificial intelligence craze.

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Nvidia, seen as a barometer of AI spending across much of the tech industry, is expected to forecast revenue growth of more than 70% for the current quarter when it reports after the market closes on Wednesday. Any disappointment is sure to rattle markets, given the company’s weighting in U.S. indices.

The stock was up slightly in premarket trading, having gained about 160% this year, outpacing the Nasdaq 100’s 16.4% gain. Options markets are signaling about 10% volatility in either direction the day after the results.

“The Nvidia result has become a macro event, in some ways as big as the payrolls and CPI in terms of market impact,” said Justin Onwuekwuyosi, chief investment officer at wealth management firm St. James’ Place. “There’s a lot of money, a lot of leverage in these consensus names, and it only takes a small disappointment to cause significant market volatility.”

Nasdaq and S&P 500 futures rose about 0.1%, while the pan-European Stoxx 600 index rose 0.5%.

Nvidia’s report and earnings guidance are seen as crucial as markets grapple with the possibility of a U.S. recession and whether the Federal Reserve can cut interest rates quickly enough to engineer a soft landing. Financial markets are currently pricing in about 100 basis points of rate cuts this year, starting in September.

While the dollar rose about 0.2% against a basket of currencies on Wednesday, it was still on track for its biggest monthly decline this year, driven by bets on interest rate cuts. Most other currencies lost ground, with the euro down 0.5%. U.S. Treasury yields were little changed.

Among individual stocks that moved, Nordstrom Inc. rose 8.3% in premarket trading in the U.S. after the department store chain issued a stronger-than-expected adjusted earnings per share forecast. Super Micro Computer Inc. shares were set to extend Tuesday’s losses after Hindenburg Research Inc. said it was shorting shares in the server equipment maker.

In Europe, GlaxoSmithKline gained after the Delaware Supreme Court decided to review a lower state court’s decision in litigation over the company’s heartburn drug Zantac.

Bitcoin fell below $60,000 as part of a broader cryptocurrency rout that included a sharp drop in the second-largest cryptocurrency Ethereum. In commodities, gold retreated after a three-day rally that had taken it close to an all-time high, while Brent crude futures fell 1%, adding to the previous day’s decline.

The story continues

Main events this week:

• Nvidia Earnings, Wednesday

• Fed’s Rafael Pusic and Christopher Waller speak Wednesday

• Eurozone Consumer Confidence, Thursday

• US GDP, Initial Jobless Claims, Thursday

• Fed’s Raphael Boucek speaks Thursday

• Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday

• Eurozone CPI, Unemployment, Friday

• US Personal Income, Spending, CPI; Consumer Sentiment, Friday

Some key movements in the markets:

Stocks

• The Stoxx Europe 600 index was up 0.5% as of 11:14 a.m. London time.

• S&P 500 futures were little changed.

• Nasdaq 100 futures were little changed.

• Dow Jones Industrial Average futures were little changed.

• MSCI Asia Pacific Index rose 0.2%

• The MSCI Emerging Markets Index saw little change.

Currencies

• The Bloomberg Dollar Index rose 0.2%.

• The euro fell 0.5% to $1.1130.

• The Japanese yen fell 0.3% to 144.41 yen per dollar.

• The offshore yuan fell 0.1% to 7.1297 yuan per dollar.

• The pound fell 0.3% to $1.3220.

Cryptocurrencies

• Bitcoin fell 3% to $59,999.01

• Ether price fell 2.2% to $2,525.91

Bonds

• The yield on the 10-year US Treasury note was little changed at 3.82%.

• The yield on German 10-year bonds fell four basis points to 2.25%.

• The yield on the 10-year British bond fell by two basis points to 3.98%.

Goods

• Brent crude fell 1.1% to $78.70 a barrel.

• Spot gold fell 0.7 percent to $2,507.17 an ounce.

This story was produced with the help of Bloomberg Automation.

–Assisted by Michael Hennessey.

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