Nasdaq, S&P, Dow futures rise as highly anticipated Nvidia earnings day arrives
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U.S. stock index futures on Wednesday gained, as market participants geared up for Nvidia’s (NVDA) earnings after the closing bell.
The world’s largest publicly listed company has continuously delivered blowout numbers since the artificial intelligence boom amid soaring demand for its chips that can power complex AI processes, and its quarterly reports have become market-moving events.
S&P 500 futures (SPX) were +0.22% ahead of market open, while Nasdaq 100 futures (US100:IND) were +0.24%. Dow futures (INDU) were +0.39%.
The anticipation for Nvidia’s (NVDA) report sent the stock up nearly 5% in the previous session, which played a large part in contributing to a positive finish for the S&P 500 (SP500) and the Nasdaq (COMP:IND). The advance also helped markets look past escalating tensions in the ongoing war between Russia and Ukraine.
“NVDA is flashing in our buyer’s frenzy indicator again. This is tactical, but suggests upside expectations are extraordinarily high/priced in. Coincidentally SMCI flashed a sellers frenzy last week,” Renaissance Macro Research said on X (formerly Twitter).
According to Seeking Alpha estimates, the chipmaker’s top-line is seen surging nearly 83% Y/Y to north of $33B in its fiscal third quarter.
“To give you a scale for their astonishing earnings trajectory over such a short period of time, at the recent lows in Jan 2023 Nvidia earned $4.4B over the preceded last (12 months). However, today the consensus will see them earn $61.4B over the last 12 months. Then, by the time we hit 2027, they are expected to earn $118.1B LTM. There has never been a large cap company like it in the history of financial markets,” Deutsche Bank’s Jim Reid said.
“Last quarter, the revenue outperformance was the smallest relative to expectations in six quarters, so it wasn’t the sort of massive beat that Nvidia has often reported over the last couple of years. And in turn, their share price was down -6.38% the following day. However, since then, the share price is up around 20%, so no lasting damage was done,” Reid added.
Target (TGT) grabbed some of the spotlight on Wednesday. The department store operator significantly slashed its annual profit guidance, sending its shares plunging -18% in pre-market trading.
The economic calendar is fairly busy, with a host of Federal Reserve speakers on tap, including Vice Chair for Supervision Michael Barr and Governor Michelle Bowman. The Atlanta Fed will release its monthly update on business inflation expectations.
Turning to the fixed-income markets, Treasury yields were higher ahead of a $16B 20-year bond auction in the afternoon. The benchmark 10-year yield (US10Y) was up 2 basis points to 4.43%, while the shorter-end, more rate-sensitive 2-year yield (US2Y) was also up 2 basis points to 4.31%.
For more, see how Treasury yields have done across the curve on the Seeking Alpha bond page.