(Bloomberg) — With Nvidia Corp. just a day after an earnings report and a slew of U.S. economic data due later in the week, markets were little moved Tuesday.
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U.S. stock futures, Treasury bonds and the dollar were little changed. The stakes are high for Nvidia, especially after an earnings season that has seen other “Magnificent Seven” companies disappoint. Upcoming reports on U.S. economic growth, prices, personal spending and jobs are adding to the wait-and-see mood.
Nvidia’s weighting, the second-largest in the S&P 500 after Apple Inc., and its lofty valuation mean it’s vulnerable to big swings that could reverberate widely. Options pricing shows traders are pricing in a roughly 10% move in either direction after earnings, which would translate to roughly 160 points in the Nasdaq 100, or a 0.8% move, according to data compiled by Bloomberg.
“Nvidia’s numbers will be good but what matters is the guidance to understand if demand is still healthy,” said Alberto Tuccio, portfolio manager at Kairos Partners. “If we get bad news, the rotation will be stronger than ever as the market is still very heavily weighted with large caps.”
Read: What September’s cut means for the economy and elections
Among individual stocks in premarket trading in the U.S., Paramount Global fell after Seagram Inc., the heir to Edgar Bronfman Jr., pulled out of a takeover bid for parent CBS, with producer David Ellison’s Skydance Media set to become the new owner. Nvidia shares rose.
Investors are hoping the bull market will expand away from big tech after Federal Reserve Chairman Jerome Powell signaled on Friday that the central bank will cut interest rates soon. Other policymakers echoed his cautious tone: San Francisco Fed President Mary Daly said it was appropriate to start cutting rates, while her Richmond counterpart Thomas Barkin said he still sees upside risks to inflation, despite backing a “taper” policy.
Economists see the personal consumption expenditures price index excluding food and energy — the Fed’s preferred measure of core inflation — rising 0.2% in July for a second month. That would bring the three-month annual rate of so-called core inflation down to 2.1%, just above the central bank’s 2% target.
“Of course, the central bank will stress that it has not made a decision yet and wrap that in the phrase ‘data-dependent,’” said Volkmar Bauer, a strategist at Commerzbank AG. “But 95 percent of what it needs to know for its September meeting should already be available.”
Meanwhile, the pan-European Stoxx 600 erased early gains as declines in retailers offset gains in automakers and miners. Volumes were low, with activity in most European indices at around three-quarters of their average level over the past 30 days.
Associated British Foods Plc fell as Deutsche Bank cut its rating on the stock to sell from hold. Ryanair Plc led gains in European airline and travel stocks after Chief Executive Michael O’Leary said a price decline between April and June had leveled off. Bunzl Plc rose after the distribution group raised its full-year profit guidance.
Main events this week:
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The Conference Board’s Consumer Confidence Index, Tuesday
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Nvidia Earnings Wednesday
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Fed’s Raphael Bostic and Christopher Waller speak Wednesday
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Eurozone Consumer Confidence, Thursday
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US GDP, Initial Jobless Claims, Thursday
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Fed’s Raphael Bostic speaks Thursday
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Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday
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Eurozone CPI, Unemployment, Friday
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U.S. Personal Income, Spending, and Personal Consumption Expenditures; Consumer Confidence, Friday
Some key movements in the markets:
Stocks
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S&P 500 futures were down 0.1% as of 7:05 a.m. ET in New York.
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Nasdaq 100 futures fell 0.1%.
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Dow Jones Industrial Average futures were little changed.
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The Stoxx Europe 600 was little changed.
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The MSCI World Index was little changed.
Currencies
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The Bloomberg Dollar Spot Index was little changed.
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The euro was little changed at $1.1165.
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The pound rose 0.2 percent to $1.3216.
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The Japanese yen fell 0.2 percent to 144.86 yen per dollar.
Cryptocurrencies
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Bitcoin fell 1.8% to $62,328.22.
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Ethereum fell 2.2% to $2,629.34.
Bonds
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The yield on the 10-year Treasury note rose three basis points to 3.85%.
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The yield on German 10-year bonds rose four basis points to 2.29%.
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The yield on the 10-year British bond rose 10 basis points to 4.01%.
Goods
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West Texas Intermediate crude fell 0.6 percent to $76.94 a barrel.
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Spot gold fell 0.3 percent to $2,510.03 an ounce.
This story was produced with the help of Bloomberg Automation.
–With the assistance of Jean-Patrick Barnert and Tugce Ozsoy.
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