OP Wire 5/22 (OP – Lite)

By Steve

Nvidia Earnings in Spotlight

The highlight of the day is Nvidia’s much-anticipated earnings report, set to be released after the market close on Wednesday. Nvidia’s performance is seen as a key indicator for the burgeoning AI industry. The company’s results will likely influence not only AI-related stocks like Super Micro Computer, AMD, Arm Holdings, and Palantir but also the broader market, as Nvidia is the third-largest U.S. company by market value.

Robust earnings from Nvidia could justify recent high stock market valuations. Analysts at Rosenblatt expect Nvidia to exceed expectations, though not matching January’s levels due to tougher comparisons. They remain optimistic, viewing Nvidia’s AI advancements as a significant growth driver.

Fed Minutes to Offer Interest Rate Clues

Later today, the Federal Open Market Committee (FOMC) will release minutes from its most recent meeting, providing insights into potential policy easing this year. Last week’s cooler-than-expected CPI release has eased concerns about prolonged high rates. However, Fed officials continue to warn about inflation risks, leading to uncertainty about when rate cuts might begin.

Futures Little Changed Ahead of Fed Minutes

U.S. stock futures remained largely unchanged on Wednesday, with the Dow futures down 13 points, S&P 500 futures dropping 2 points, and Nasdaq 100 futures up 6 points. The market awaits Nvidia’s earnings and the Fed minutes. Notable earnings reports from Target, Analog Devices, TJX, and Raymond James are also expected.

Urban Outfitters saw a 6% rise in stock after surpassing earnings expectations, while Toll Brothers gained 1% after raising its delivery guidance.

UK Inflation Falls by Less Than Expected

Inflation in the UK fell to 2.3% in April, down from 3.2% in March but still above the forecast of 2.1%. This has tempered investor expectations for an interest rate cut by the Bank of England next month. Despite a significant drop in household energy tariffs, services inflation remained high, raising concerns about domestic price pressures.

Crude Prices Fall After U.S. Inventories Build

Crude prices fell for the third consecutive session on Wednesday due to concerns over U.S. interest rates and an unexpected build in oil inventories. The American Petroleum Institute reported a 2.5 million barrel increase, raising fears of sluggish demand ahead of the summer travel season. Official data from the Energy Information Agency is expected later today. Recent cautious statements from Fed officials have also weighed on market sentiment.

Staying patient today. NVDA will be the main driver but they can perform & the market can still sell off so be careful! See you in chat

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