Stocks are poised for a slight uptick on Wednesday as investors anticipate the crucial third-quarter earnings report from chip giant Nvidia. This upcoming disclosure is seen as a pivotal moment that could rejuvenate interest in the beleaguered artificial intelligence sector, which has faced recent setbacks.
Futures linked to the Dow Jones Industrial Average indicated a modest increase of 50 points, or 0.1%. The S&P 500 and Nasdaq 100 futures reflected a similar optimism, climbing 0.3% each. Meanwhile, Bitcoin made a slight recovery, rising 0.6% to $91,776 over the last 24 hours, suggesting a small rebound in the cryptocurrency market. The yield on the 10-year Treasury note also edged up, gaining 1 basis point to reach 4.13%. The dollar strengthened by 0.1% against a broad range of currencies, and gold prices increased by 0.6%, now standing at $4,089 per ounce.
The market has endured a turbulent few days, characterized by a significant sell-off of risk assets as concerns surrounding inflated valuations in the AI sector escalate. Wall Street is looking to Nvidia’s earnings report, which is scheduled for release after Wednesday’s market close, to provide a necessary boost. Both the S&P 500 and the Dow have been on a losing streak, declining for four consecutive sessions.
Even high-profile investments, such as those made by Nvidia and Microsoft, have failed to lift market spirits. Recently, Nvidia announced a substantial commitment of $10 billion, while Microsoft pledged $5 billion to support the AI startup Anthropic, which has signed a $30 billion deal for cloud computing resources from Microsoft. Despite these impressive figures, shares of both Nvidia and Microsoft declined, reflecting investor anxiety that the booming AI market may be on the verge of creating a significant bubble.
Henry Allen, a macro strategist at Deutsche Bank, observed the shift in market sentiment. He noted that the recent partnership deals, which previously led to immediate rallies, failed to resonate with traders, underscoring a growing skepticism. He remarked, “So it goes to show how sentiment has turned more negative in the last few weeks, with the circular AI deals being treated with increasing caution as the conversation around a potential bubble has gathered pace.”
In addition to Nvidia, earnings reports are also expected from home-improvement retailer Lowe’s and major distributor Target prior to the market opening. However, early indicators suggested a day of volatile trading as investors awaited the significant earnings announcements, with Nvidia’s results anticipated to take center stage.
