Martin Baccardax
Originally Published: February 21, 2024 12:08 p.m.
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U.S. equity futures edged lower again Wednesday, while Treasury yields and the dollar held steady, as investors braced for the release of minutes from the Federal Reserve’s January policy meeting as well as Nvidia’s highly anticipated fiscal-fourth-quarter earnings after the closing bell.
Nvidia’s (NVDA) fortunes, which are closely linked to both the market’s recent rally and the broader prospects for AI-related technologies, will be in sharp focus later today when the group publishes both its January-quarter earnings and near-term revenue outlook.
Dubbed “the most important stock on planet Earth” by Goldman analysts, Nvidia has powered around a third of this year’s 6.06% gain for the Nasdaq 100. And along with its Magnificent 7 peers Microsoft, Amazon and Meta Platforms it has helped drive around 75% of the S&P 500’s total return.
Analysts expect Nvidia to post a bottom line of $4.64 per share, a more than fivefold increase from the year-earlier period, with revenue more than tripling (up 240%) to $20.62 billion.
Nvidia shares, which have risen more than 44% so far this year, were marked 1.8% lower in premarket trading to indicate an opening bell price of $682.30 each.
Amazon (AMZN) shares will also be in focus after the tech and e-retailing giant was pegged to replace Walgreens Boots Alliance (WBA) in the Dow Jones Industrial Average at the start of trading on Feb. 26.
Amazon shares were last marked 1.2% higher at $169 each while Walgreens fell 2.7% to $21.72 each.
Away from stocks, benchmark 10-year note yields were little changed from last night’s close at 4.273% ahead of today’s Fed minutes, which will detail discussions around the central bank’s January rate meeting. In addition, a $16 billion auction of new 20-year notes is set later in the session.
“Traders will be quite cognizant of any key language or dissension of Fed presidents when the minutes are released,” said Jay Woods, chief global strategist at Freedom Capital Markets. “It could be telling when it comes to thoughts of a continued pause vs a cut or maybe even, dare I say, another hike at future meetings.”
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was last marked 0.07% higher at 104.151.
On Wall Street, stocks are set for another softer open following last night’s tech-led declines, with futures tied to the S&P 500 suggesting an opening-bell pullback of around 9 points.
Futures tied to the Dow are indicating a 67-point decline while those linked to the Nasdaq are set for a 70-point retreat at the start of trading.
In overseas markets, firm gains for stocks in China, powered in part by the country’s ongoing moves to stabilize trading and kickstart the world’s second-largest economy, helped the regionwide MSCI ex-Japan index rise 0.11% into the close of trading.
Japan’s Nikkei 225, meanwhile, ended 0.26% lower in Tokyo, led by outsized declines for chip and tech stocks ahead of Nvidia’s earnings report today.
In Europe, HSBC shares tumbled more than 7% in London after the bank posted record full-year profit but missed analysts’ estimates after taking a $3 billion hit tied to its exposure in China.
Britain’s FTSE 100 was marked 0.88% lower in early London trading while the regionwide Stoxx 600 benchmark fell 0.13% in Frankfurt.
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