Global stocks saw gains as oil prices fell, leading to lower bond yields. Traders were keenly awaiting Nvidia Corp.'s earnings report for insights into the future of artificial intelligence. A rebound in chipmakers ended a seven-day losing streak for Nvidia, pushing the Nasdaq 100 to outperform other major benchmarks. Brent crude settled below $90 a barrel amidst hopes for renewed energy flows through the Strait of Hormuz and reports of the US returning diplomats to Middle East embassies, easing concerns about escalating conflict.
The decline in oil prices also alleviated worries about inflationary pressures, benefiting Treasuries. The yield on 10-year Treasuries dropped seven basis points to 4.63%. Matt Maley of Miller Tabak suggested that Federal Reserve Chair Kevin Warsh is likely to maintain his hawkish stance in an upcoming speech, making Nvidia's earnings reaction critical given the mixed performance of other chip stocks this earnings season.
Analysts estimate Nvidia's revenue nearly doubled last quarter, reaching $92 billion, surpassing the annual revenue of many competitors. Mark Malek of Siebert Financial noted that Nvidia is performing exceptionally well, and while good news is anticipated, any misstep could pose a challenge but also an opportunity for investors. Kenny Polcari of SlateStone Wealth highlighted that investors are looking for strong AI demand, sustained hyperscaler spending, healthy margins, and guidance that justifies the significant investment in AI.
