Stocks Rise as Nvidia Countdown Begins: Markets Wrap

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

Most Read from Bloomberg

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. Any disappointment is sure to rattle markets, given the company’s weight in U.S. indices.

The stock is up about 160% this year, far outpacing the Nasdaq 100’s 16.4% gain, with options expected to move about 10% in either direction the day after the results.

Futures on the Nasdaq and S&P 500 rose about 0.1%, while the European Stoxx 600 rose 0.3%.

“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.”

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. U.S. Treasury yields were little changed.

The yen extended losses against the dollar after comments from Bank of Japan Deputy Governor Ryozo Himeno, 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 the utmost vigilance.”

Among individual stocks that moved, Nordstrom Inc. rose 6% 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. fell, having tumbled Tuesday after Hindenburg Research Inc. said it would sell 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.

The story continues

Bitcoin fell below $60,000 as part of a broader cryptocurrency market rout that included a sharp drop in the second-largest token, Ethereum. In commodities, gold retreated after a three-day rally that had taken it close to an all-time high.

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 and Unemployment, Friday

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

Some key movements in the markets:

Stocks

• The Stoxx Europe 600 index was up 0.3% by 9:59 a.m. London time.

• S&P 500 futures were little changed.

• Nasdaq 100 futures rose 0.1%.

• 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 0.4% to $1.1141.

• The Japanese yen fell 0.3% to 144.35 yen per dollar.

• The offshore yuan was little changed at 7.1265 against the dollar.

• The pound fell 0.2% to $1.3230.

Cryptocurrencies

• Bitcoin fell 4.2% to $59,249.35

• Ether price fell 4.5% to $2,464.14

Bonds

• The yield on the 10-year US Treasury note was little changed at 3.83%.

• The yield on the 10-year German bond fell by three basis points to 2.26%.

• The yield on the 10-year UK bond was little changed at 3.99%.

Goods

• Brent crude fell 0.8% to $78.92 a barrel.

• Spot gold fell 0.7 percent to $2,508.17 an ounce.

This story was produced with the help of Bloomberg Automation.

Most Read from Bloomberg Businessweek

©2024 Bloomberg LP