The Market News Today: Will Nvidia Earnings Justify Current Rally?

Nvidia Earnings Test Market Rally Amid High Expectations

Nvidia’s upcoming earnings report, due after the close on Wednesday, is crucial for sustaining May’s market rally, with expectations of a fivefold net income increase and tripled revenue. Key focus areas include AI revenue guidance, profit margins, and capacity constraints. Analysts will also monitor potential impacts from U.S.-China tech tensions and stock price volatility, with a muted 8.7% stock move potentially triggering significant market reactions.

Fed Minutes to Reveal Rate-Cut Insights Amid Inflation Watch

The Fed will release May FOMC meeting minutes at 18:00 GMT. Investors seek clues on rate-cut timing. Officials prefer waiting for inflation data before lowering rates. Markets predict a 98.4% chance rates stay unchanged in June and an 80.4% chance in July, with a 60.1% chance of a 25 basis point cut by September. The Fed funds rate is expected to be around 5% by December 2024. This release is not expected to cause major market reactions.

Target’s Q1 Earnings Report Highlights Price Cuts and Consumer Spending

Target will release its fiscal Q1 earnings on Wednesday, shortly after announcing price cuts on groceries and everyday items. Wall Street expects earnings per share of $2.06 and revenue of $24.52 billion, down from $25.32 billion last year. Target has faced challenges from price-sensitive consumers, with only 20% of sales from groceries compared to Walmart’s 60%. Target shares closed Tuesday at $155.78, up 9% year-to-date, trailing the S&P 500’s nearly 12% gain.

U.S. Stock Futures Steady as Investors Await Nvidia Earnings

U.S. stock futures were stable early Wednesday, with Nvidia’s earnings report highly anticipated. Urban Outfitters rose 5% and Toll Brothers 1% in extended trading. Nvidia, up nearly 93% in 2024, gained 0.6% Tuesday. Earnings from Target, Analog Devices, TJX, and Raymond James are also expected Wednesday. Additionally, investors await the latest Federal Open Market Committee minutes and April’s existing home sales.

U.S. Treasury Yields Rise Amid Fed Rate Comments

U.S. Treasury yields climbed Wednesday as investors assessed Fed officials’ remarks on inflation and interest rates. At 4:40 a.m. ET, the 10-year yield rose to 4.4374%, and the 2-year yield hit 4.8626%. Fed policymakers emphasized patience on rate cuts, citing inflation above the 2% target. More Fed speeches and meeting minutes are expected Wednesday, alongside April’s existing home sales data. U.K. inflation and Japan’s bond yields also impacted market expectations.