- US stocks were mixed Wednesday as traders looked ahead to Nvidia’s earnings report.
- Wall Street is estimating the chipmaker will report $33 billion in revenue for the third quarter.
- Traders, meanwhile, dialed back their expectations for rate cuts after a slew of Fed speakers.
US stocks were mixed on Wednesday as traders waited for Nvidia’s earnings report, took in fresh geopolitical conflict, and re-adjusted their expectations for Fed rate cuts.
Investors are eager to see if Nvidia’s third-quarter results can continue to deliver and show that the artificial intelligence trade is still flying high. Shares of the chip giant ended the day slightly lower, at $145.89.
Wall Street is expecting $33 billion in revenue for the quarter and is looking for guidance on customer demand for Blackwell, its next-gen AI chip.
Nvidia CEO Jensen Huang previously said demand for Blackwell was “insane,” fueling some optimism for the stock. But even if the chip giant reports strong figures and solid guidance, shares risk selling off if earnings don’t blow away investors’ expectations, according to Paul Marino, the chief revenue officer of Themes ETFs.
“NVIDIA is under pressure to deliver an overwhelming beat to justify its valuation and separate itself from the inconsistent performance seen across other semiconductor companies this quarter. With a P/E of 52x, meeting expectations won’t be enough to excite investors,” Marino said in a note on Wednesday.
“The market is hoping for not just strong guidance but ‘insane’ guidance that’s not yet priced in,” Quincy Krosby, the chief global strategist for LPL Financial, added in a note.
Investors are pricing in an 8% swing in Nvidia stock after it reports earnings, implying a $300 billion move, according to options data compiled by Bloomberg.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Wednesday:
- S&P 500: 5,917.11, up 001.%
- Dow Jones Industrial Average: 43,408.47, up 0.32% (+139.53 points)
- Nasdaq composite: 18,966.14, down 0.11%
Traders were also rattled by rising geopolitical tensions on Wednesday, with Ukraine conducting fresh strikes on Russia using US-made weapons.
Meanwhile, markets took in a slew of hawkish comments from Fed officials, causing investors to ramp up bets for a Fed pause.
Odds that the Fed will skip cutting rates at their next policy meeting rose to 48%, up from a 17% chance priced in a week ago, according to the CME FedWatch tool.
Fed Governor Michelle Bowman said it appeared the progress to bring down inflation had “stalled” in recent months.
“It’s concerning to me that we’re recalibrating policy, but we haven’t yet achieved our inflation goal,” she said at an event.
Fed Governor Lisa Cook also suggested a cautious approach to easing monetary policy.
“It likely will be appropriate to move the policy rate toward a more neutral stance over time,” she said at a separate event, adding that she expected more “bumps along the road” as inflation trended lower.
Here’s what else is going on:
- Billionaire Howard Marks is snapping up “uninvestable” Chinese assets.
- The “greatest bubble in human history” is close to bursting, according to black-swan investor Mark Spitznagel.
- Gold is soaring to record highs within Trump’s first year as president, according to one commodities expert.
- Wall Street’s “Dr. Doom” economist just launched an ETF to protect against Trump risks.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil dipped 0.63% to $68.95 a barrel. Brent crude, the international benchmark, was higher 0.34% to $73.06 a barrel.
- Gold inched up 0.61% to $2,647.75 an ounce.
- The 10-year Treasury yield rose 3 basis points to 4.412%.
- Bitcoin gained 1.85% to $94,224.15.
