Stocks stabilized on Wednesday as traders await earnings from Nvidia, the largest company in the history of financial market.
The S&P 500 was flat at the open after falling for four straight days. The Dow was also little changed, while the Nasdaq Composite rose 0.2%
The set-up has been weak ahead of Nvidia’s earnings. Its stock is flat over the past month through today. On an average the stock has risen 9.7% in the month before earnings since 2020 through August, its latest earnings, according to Dow Jones Market Data.
“It’s notable that this time could be the first instance in which the stock ends the pre-earnings month lower, with one trading day still to go,” wrote Deutsche Bank’s strategist Jim Reid.
Concerns over the AI ecosystem have been a problem for the stock, but so are expectations for the Fed to keep rates higher by the end of 2025, hedge fund profit taking and an expected weak employment report. That’s taken Nvidia 7% off its highs.
It spells opportunity to some. “As such, we remain buyers of AI related stocks on share price weakness, but waiting for either an upside NVDA surprise or more washed out technical (RSI, 1-month lows, inverted VIX) to become more aggressive buyers,” wrote Chris Senyek from Wolfe Research.
Nvidia’s earnings get such emphasis given that it accounts for 7.5% of the S&P 500. A surprisingly negative earnings report will almost certainly dent this year’s double-digit market returns.