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

investmentnews.com:

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