Looming Nvidia Earnings May Keep Traders On The Sidelines

(RTTNews) - The major U.S. Index futures are currently pointing to a roughly flat open on Wednesday, with stocks likely to show a lack of direction following the modest strength seen in the previous session.

Traders may be reluctant to make significant moves ahead of the release of AI giant Nvidia's (NVDA) second quarter results after the close of today's trading.

In light of recent concerns about AI spending, Nvidia's results and guidance could have a significant impact on the outlook for the sector.

"Assuming there is no major movement in either a positive or negative direction in geopolitical terms, tonight's second quarter results from Nvidia are likely to set the tone for markets through the remainder of the week," said AJ Bell investment director Russ Mould. He added, "Investors typically assume Nvidia will always beat expectations, so the AI chip giant will have to produce or say something very special to truly impress the market."

The futures remained little changed even after the Commerce Department released a typically closely watched report showing consumer prices in the U.S. increased by slightly more than expected in the month of July.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 in July after edging down by 0.1 percent in June. Economists had expected prices to inch up by 0.1 percent.

The report also said the annual rate of growth by the PCE price index came in at 3.7 percent in July, unchanged from in June. The annual rate of growth was expected to dip to 3.6 percent.

Excluding food and energy prices, the core PCE price index still rose by 0.2 percent in July after inching up by 0.1 percent in June. The increase matched economist estimates.

The annual rate of growth by the core PCE price index was 3.3 percent in July, unchanged from June and in line with expectations.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

Stocks gave back some ground after an early surge but maintained a positive bias throughout the trading session on Tuesday. The major averages all moved to the upside after ending the previous session mixed.

The tech-heavy Nasdaq advanced 171.11 points or 0.7 percent to 26,151.80, the S&P 500 climbed 24.42 points or 0.3 percent to 7,677.28 and the Dow rose 160.24 points or 0.3 percent to 53,577.40.

The early strength on Wall Street partly reflected a positive reaction to an extended nosedive by the price of crude oil, which has continued to give back ground after snapping a six-day winning streak on Monday.

After plunging by more than 2 percent during Monday's trading, U.S. crude oil futures plummeted by more than 3 percent.

The extended pullback in crude oil prices comes after the Treasury Department officially announced "Operation Economic Outcast," calling it an unprecedented, whole-of-government, economic campaign against Iran and its "enablers."

While the U.S. sanctioned nearly 60 entities, individuals, and vessels that it said "enable the Iranian regime's recklessness," traders seem relieved the Treasury stopped short of immediate secondary sanctions against other countries sustaining Iran's trade.

Traders also seem optimistic that the Trump administration's shift toward economic measures to pressure Iran has reduced the likelihood of the resumption of a full-scale military offensive.

The steep drop in crude oil prices also contributed to a continued decrease in treasury yields, which added to the positive sentiment on Wall Street.

However, traders may have been reluctant to make more significant bets ahead of key events in the coming days, including the release of key U.S. inflation data, Nvidia's (NVDA) quarterly earnings and the Jackson Hole economic symposium.

In U.S. economic news, the Conference Board released a report showing a modest decrease in consumer confidence in the month of August amid a deterioration in consumer expectations

The Conference Board said its consumer confidence index dipped to 89.4 in August from a downwardly revised 90.2 in July.

Economists had expected the consumer confidence index to edge down to 90.1 from the 90.8 originally reported for the previous month.

Computer hardware stocks saw substantial strength on the day, with the NYSE Arca Computer Hardware Index surging by 3 percent after moving sharply lower over the past several sessions.

Considerable strength was also visible among gold stocks, as reflected by the 2.3 percent jump by the NYSE Arca Gold Bugs Index.

Airline, brokerage and semiconductor stocks also saw notable strength, while oil producer stocks moved sharply lower along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are tumbling $2.08 to $80.28 a barrel after plunging $2.65 to $82.36 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,676.70, down $17.80 compared to the previous session's close of $4,715.90. On Tuesday, gold edged down $3.30.

On the currency front, the U.S. dollar is trading at 159.14 yen compared to the 159.16 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1662 compared to yesterday's $1.1674.

Asia

Major stock markets across Asia traded on a positive note amidst a decline in crude oil prices as well as a surge in tech stocks. Gains were limited by anxiety ahead of the release of the PCE-based inflation readings from the U.S. as well as the Fed Chair's speech at the Jackson Hole symposium later in the week.

China's Shanghai Composite Index climbed 0.6 percent from the previous close of 3,889.44 to finish trading at 3,912.52. The day's trading ranged between 3,881.74 and 3,926.44. The index has gained 1.1 percent over the course of the past year.

The Japanese benchmark Nikkei 225 Index gained or 0.6 percent to close trading at 66,258.00. The day's trading ranged between 65,381.50 and 66,509.00. Easing bond yields and declining crude oil prices supported sentiment.

Mitsubishi Materials Corp jumped almost 6 percent followed by Tokyo Electric Power Company that gained 4 percent. SUMCO Corp dropped 3.9 percent followed by Kawasaki Kisen Kaisha that lost 3.36 percent.

The Hang Seng Index of the Hong Kong Stock Exchange rose 0.6 percent from the previous close to finish trading at 25,652.97. The day's trading range was between a high of 25,800.22 and a low of 25,615.94. The index has gained half percent over the past year.

The Korean Stock Exchange's Kospi Index jumped 1 percent from the previous close of 6,742.74 to close trading at 6,808.21. The day's trading range was between 6,704.10 and 6,887.18. Nevertheless, the index is holding on to gains of more than 114 percent over the course of the past year.

Australia's S&P/ASX200 Index closed trading at 9,127.80, losing 0.4 percent from the previous close of 9,164.60. The day's trading ranged between 9,127.80 and 9,220.60 while markets assessed the likelihood of another rate hike by the Reserve Bank of Australia in the wake of higher-than-expected inflation readings.

Lovisa Holdings led gains with a surge of 12.7 percent following full year results presentation. Pantoro Gold as well as Perseus Mining followed with gains of more than 9 percent. Droneshield plunged more than 11 percent. Worley, Neuren Pharmaceuticals, Wisetech Global, all lost more than 10 percent.

The NZX 50 Index of the New Zealand Stock Exchange edged up 0.2 percent to close trading at 14,013.21 amidst gains in minerals and tech sectors. The day's trading ranged between 13,969.60 and 14,069.22. The benchmark index has gained more than 8 percent over the course of the past year.

Pacific Edge jumped 6.3 percent followed by Scales Corporation that rallied 5.4 percent. Serko led losses with a decline of 4.5 percent. Air New Zealand also dropped 3.7 percent.

Europe

European markets moved slightly higher on Wednesday amid easing concerns about inflation and interest rates, as oil prices fell sharply on renewed optimism about Iran peace talks and possible reopening of the Strait of Hormuz sooner than later.

Brent crude futures dropped to $84.56 a barrel, losing about 3%, on reports that Oman and Iran had discussed establishing a temporary joint maritime corridor in the Strait of Hormuz.

The pan European Stoxx 600 edged up 0.12%. Germany's DAX and France's CAC 40 moved up 0.18% and 0.43%, respectively. The UK's FTSE 100 edged down 0.13% despite a good show by stocks from the mining sector.

In the UK market, miner Antofagasta climbed 2.5%. Anglo American Plc gained 1.2%, while Glencore and Rio Tinto posted moderate gains.

Diploma, Halma, Howden Joinery Group, Intercontinental Hotels Group, Persimmon, Games Workshop, Airtel Africa, Spirax Group, IAG, Weir, Coca-Cola HBC, Aberdeen Group and JD Sports Fashion gained 1%-2.3%.

In the German market, Deutsche Bank and Heidelberg Materials both moved up by about 4.3%. Commerzbank, MTU Aero Engines, Qiagen, Symrise, E.ON, Rheinmetall, Fresenius, Beiersdorf, Fresenius Medical Care and Continental gained 1%-2.3%.

SAP dropped by about 3%. Porsche Automobil Holding, Scout24, Volkswagen and Siemens Energy drifted down 1%-1.4%.

In economic news, a report from the Confederation of British Industry showed headline sales balance fell to -48 in August from -26 in July, well below market expectations of -24.

U.S. Economic News

Consumer prices in the U.S. increased by slightly more than expected in the month of July, according to a closely watched report released by the Commerce Department on Wednesday.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 in July after edging down by 0.1 percent in June. Economists had expected prices to inch up by 0.1 percent.

The report also said the annual rate of growth by the PCE price index came in at 3.7 percent in July, unchanged from in June. The annual rate of growth was expected to dip to 3.6 percent.

Excluding food and energy prices, the core PCE price index still rose by 0.2 percent in July after inching up by 0.1 percent in June. The increase matched economist estimates.

The annual rate of growth by the core PCE price index was 3.3 percent in July, unchanged from June and in line with expectations.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income climbed by 0.4 percent in July after rising by 0.2 percent in June, while personal spending rose by 0.2 percent in July after increasing by 0.3 percent in June.

The Commerce Department also released a report on Wednesday showing a sharp increase in new orders for U.S. manufactured durable goods in the month of July.

The report said durable goods orders shot up by 1.1 percent in July after climbing by 0.5 percent in June. Economists had expected durable goods orders to rise by another 0.5 percent.

Excluding orders for transportation equipment, durable goods orders climbed by 0.4 percent in July after jumping by 1.1 percent in June. Ex-transportation orders were expected to increase by 0.6 percent.

Another report released by the Commerce Department on Wednesday showed the increase in U.S. gross domestic product in the second quarter was unrevised from the initial estimate.

The Commerce Department GDP jumped by 1.5 percent in the second quarter, unchanged from the original estimate and in line with economist estimates.

The report said an upward revision to consumer spending was partly offset by an upward revision to imports, which are a subtraction in the calculation of GDP.

The increase in GDP in the second quarter reflects a slowdown compared to the 2.1 percent surge in the first quarter.

At 10:30 am ET, Energy Information Administration is scheduled to release its crude oil inventories in the week ended August 21st. Crude oil inventories are expected to increase by $1.9 million barrels.

Richmond Federal Reserve President Thomas Barkin is due to participate in a panel before the Greensboro Chamber of Commerce "State of Our Community" event.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $70 billion worth of five-year notes.