US futures steady as Nvidia results take center stage: Markets closed

(Bloomberg) — U.S. stock futures pointed to a steady open for Wall Street as investors awaited crucial earnings from Nvidia Corp. to see if the powerhouse of artificial intelligence can maintain this year’s stock rally.

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Nasdaq 100 futures traded flat, while S&P 500 futures fell. Nvidia shares fell 0.4% in premarket trading, having hit new records this week. Its results, seen as the grand finale to a robust earnings season in the US, are expected to show a 243% increase in revenue, but a 90% year-to-date stock rally could set a high bar for further gains.

Markets are also increasingly nervous about the prospect of stubbornly high inflation, which could prevent central banks from easing policy as soon as anticipated. The latest data from the United Kingdom showed that inflation eased less than expected last month, while Federal Reserve policymakers have repeatedly suggested the need for a wait-and-see stance on rate cuts.

“With stocks at record levels, investors will need to see economic data that remains ‘Goldilocks,’ the absence of any aggressive surprises from the Fed, stable yields, good retail earnings, and solid guidance from AI leader Nvidia to make significant headway beyond current levels,” Tom Essaye of Sevens Report said in a note to clients.

The European Stoxx 600 stock index fell 0.3% as investors lowered expectations for the timing of the Bank of England’s first rate cut. UK gilt yields rose more than 10 basis points, raising borrowing costs across Europe, while US 10-year Treasury bond yields also rose.

The UK data came hours after New Zealand’s central bank kept interest rates unchanged and signaled policy would remain tight for longer, while on Tuesday Fed Governor Christopher Waller said he needed see several other good inflation numbers to initiate rate cuts. The minutes of the Fed’s monetary policy meeting, scheduled for Wednesday, may offer clues into the thinking of rate-setters.

“Both the RBNZ and UK inflation data highlight the tense nature of the current environment, with investors struggling to assess the timing and extent of long-awaited central bank easing cycles,” said the head of strategy. Rabobank rates, Richard McGuire.

Among U.S. premarket stock movers, Target Corp. fell nearly 7% after its earnings forecast was missed, Lululemon Athletica Inc. fell as much as 4% after announcing organizational changes, and Tesla Inc. dropped its monthly low in April.

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Stock trading volume is so low it feels like summer vacation

Investors in Europe are watching to see whether mining company BHP Group Ltd. will launch its takeover bid for rival Anglo American Plc, in what could be among the world’s biggest deals this year. BHP has until 5pm London time to announce its firm intention to make an offer. Anglo shares traded weaker on the day.

Main events this week:

• US Existing Home Sales Wednesday

• Fed Minutes, Wednesday

• Nvidia Earnings Wednesday

• Eurozone S&P Global Manufacturing and Services PMIs, Consumer Confidence, Thursday

• G-7 financial meeting, May 23-25

• US new home sales, initial unemployment claims, Thursday

• Fed’s Raphael Bostic Speaks Thursday

• US Durable Goods Consumer Sentiment Friday

• Fed’s Christopher Waller Speaks on Friday

Some of the main movements in the markets:

Actions

• The Stoxx Europe 600 was down 0.4% at 12:43 pm London time

• S&P 500 futures fell 0.1%

• Nasdaq 100 futures little changed

• Dow Jones Industrial Average futures fell 0.2%

• The MSCI Asia-Pacific index fell 0.2%

• The MSCI Emerging Markets index rose 0.2%

Coins

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.2% to $1.0827

• The Japanese yen fell 0.3% to 156.58 per dollar

• The offshore yuan was little changed at 7.2511 per dollar

• The British pound was little changed at $1.2706

Cryptocurrencies

• Bitcoin rose 0.3% to $69,954.76

• Ether fell 0.5% to $3,726.41

Titles

• The yield on the 10-year Treasury note rose four basis points to 4.45%

• Germany’s 10-year yield rose five basis points to 2.55%

• Britain’s 10-year yield rose 10 basis points to 4.23%

goods

• Brent crude fell 1% to $82.06 a barrel

• Spot gold fell 0.6% to $2,406.53 an ounce

This story was produced with help from Bloomberg Automation.

–With help from Winnie Hsu.

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