S&P500 Forecast: Nvidia Lifts US Indices as Traders Await Powell’s Rate Cut Signal

Stocks Notch Records Ahead of Fed Decision as Nvidia Breaks $5 Trillion Barrier

U.S. equities hit new record highs Wednesday, led by Nvidia’s surge past a $5 trillion valuation and investor focus on the Federal Reserve’s upcoming rate decision. Shortly after the opening, the Nasdaq was up 0.77%, the S&P 500 added 0.40%, and the Dow climbed 261.87 points, with all major indexes setting fresh intraday records.

Tech strength anchored the rally, while traders looked ahead to a pivotal day for both monetary policy and megacap earnings. Market participants are positioning around a highly anticipated rate cut and watching for signs of sustained AI-driven growth.

Is a dovish Fed stance baked into the market?

Markets are pricing in a 25 basis point rate cut at the close of the Fed’s meeting, but the key focus is whether Chair Jerome Powell signals another cut before year-end. Any indication of a more accommodative outlook could reinforce bullish sentiment.

Progress in U.S.–China trade discussions may also support the case for easing. Macquarie strategist Thierry Wizman noted that the reduced threat of tariffs could temper inflation, potentially encouraging a more dovish policy tone from the Fed.

How is Big Tech influencing sentiment?

Chipmakers led gains, with Nvidia jumping over 4% to cross $5 trillion in market cap—a first for any U.S. company. AMD and Micron also added about 2%. Traders are awaiting earnings from Microsoft, Alphabet, and Meta for further signals on AI investment, while Apple and Amazon will report Thursday.

Strong AI-related momentum remains a key theme, and any disappointment from these firms could weigh on the broader indexes given their heavy weighting.

Which earnings stood out from the broader market?

Earnings were mixed across sectors. Teradyne surged 20.5% after beating estimates and offering upbeat guidance, while Centene rallied 10% on a surprise profit and raised outlook. On the downside, Fiserv sank 28% following a major earnings miss and full-year guidance cut. Enphase Energy dropped over 11% on weak revenue guidance and margin pressure tied to tariffs.

Caterpillar rose 4% on strong Q3 results, while TE Connectivity, Seagate, and Bloom Energy also topped forecasts. However, CVS, Garmin, Generac, and Mondelez slipped after issuing weak reports or guidance.

Market outlook: Bullish with focus on earnings and Fed tone

Sentiment remains bullish heading into Thursday, with traders focused on megacap earnings and the Fed’s policy message. While stretched valuations and political risks persist, solid corporate results and dovish signals from Powell could sustain the rally into year-end.

If Powell emphasizes economic resilience alongside rate flexibility, it may further boost risk appetite and reduce rate cut uncertainty. Conversely, any indication of hesitation or concern about inflation stickiness could temper gains.

For now, the market appears confident that the Fed will support growth without reigniting inflation, a scenario equity bulls are pricing in as the fourth quarter advances.

More Information in our Economic Calendar.