Hello everyone. Tonight, global capital markets are holding their breath, waiting for Nvidia to release its latest earnings report early Thursday morning. This report will point the way forward for the next phase of development in artificial intelligence. Tonight, U.S. stock market performance is somewhat lackluster, as if it’s calm before the storm, with popular stocks and sectors moving up and down in mixed fashion.
The latest released economic data has not significantly changed market expectations for the Federal Reserve to raise interest rates this year. One of the Fed’s commonly used inflation indicators—the U.S. personal consumption expenditures (PCE) price index for July—showed that prices rose 0.2% from the previous month and increased 3.7% from the same period last year. Both figures are 0.1 percentage point higher than economists surveyed by the Dow Jones had expected.
However, excluding food and energy prices, core PCE came in line with market expectations, up 0.2% month over month and 3.3% year over year. The money market has already fully priced in expectations that the Federal Reserve will raise rates before December. The latest data show that the U.S. economy remains strong. Although a key inflation gauge met market expectations, the inflation rate is still far above the Fed’s target. Beyond the macroeconomic backdrop, Wall Street is also waiting for Nvidia’s earnings report. The market is watching Nvidia not only because of the chip giant’s own performance, but more importantly, because of what Nvidia’s earnings will mean for the entire AI industry and the U.S. stock market. Analysts expect Nvidia’s revenue this quarter to nearly double year over year; if that happens, it would be the company’s fastest revenue growth in two years.
According to FactSet data, Wall Street expects Nvidia’s second-quarter earnings per share to be $2.09, with revenue reaching $92.28 billion. Because Nvidia is currently the largest company by market cap in the S&P 500, with a market value of more than $5 trillion, this earnings report is likely to become an important bellwether for the entire U.S. stock market. Rob Conzo, CEO of Wealth Alliance, a wealth management firm that holds Nvidia shares, said: “Nvidia is the best barometer of AI spending. From an infrastructure standpoint, it helps us determine whether hyperscale cloud providers are continuing to accelerate investment or whether they’ve begun to narrow.” Overall, since 2026, Nvidia’s stock price has continued to accelerate by about 14%, showing a sharp rise, but unexpectedly so. Last year, Nvidia’s stock rose 34% year to date; and in the same period in 2024, the gain exceeded 150%. The reason is not hard to understand. With persistent high inflation, ever-rising interest rates, and intensifying global geopolitical risks, investors are becoming increasingly cautious about how long AI trading will last. Despite Nvidia’s market cap exceeding $5 trillion and ranking first globally, its valuation has been declining since the beginning of this year. One analyst noted: “Nvidia is no longer the most exciting part of the overall market, and it’s even no longer the most eye-catching part of AI trading. The real supply shortage is in storage, optical communications, and energy. Money is gradually shifting from semiconductors to other aspects of AI infrastructure—and may even flow back in the future to hyperscale cloud service providers.” Trading performance around the earnings releases has not been ideal. Data show that over the past six earnings reports, in five of them, Nvidia’s stock fell on the second trading day after the release. Currently, the options market expects Nvidia’s stock price to move by about 5% after the earnings report. Of course, if Nvidia delivers strong results and provides encouraging forward guidance, its stock could still rise and reignite the broader AI trading enthusiasm.
