Choppy Trading Likely To Persist On Wall Street Ahead Of Nvidia Earnings

The major U.S. index futures are currently pointing to a roughly flat open on Wednesday, with stocks likely to extend the lackluster performance seen in the previous session.

Traders may continue to stick to the sidelines ahead of the release of fiscal second quarter results from market leader Nvidia (NVDA) after the close of today’s trading.

Shares of Nvidia jumped by 1.5 percent on Tuesday, regaining ground after tumbling by 2.3 percent during Monday’s session.

Traders are also looking ahead to Friday’s release of the Commerce Department report on personal income and spending in the month of July, which includes readings on inflation said to be preferred by the Federal Reserve.

Economists currently expect the annual rate of consumer price growth to inch up to 2.6 percent in July from 2.5 percent in June, while the annual rate of core consumer price is expected to tick up to 2.7 percent in July from 2.6 percent in June.

While the data is not likely to affect optimism the Fed will lower rates next month, it could impact expectations for how quickly the central bank cuts rates.

During his speech at the Jackson Hole Economic Symposium last Friday, Fed Chair Jerome Powell said the “time has come for policy to adjust” but noted the “timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Stocks showed a lack of direction over the course of the trading session on Tuesday, with the major averages bouncing back and forth across the unchanged line. Despite the choppy trading, the Dow crept up to a new record closing high.

The major averages all finished the day modestly higher. The Dow inched up 9.98 points or less than tenth of a percent to 41,250.50, the Nasdaq rose 29.05 points or 0.2 percent to 17,754.82 and the S&P 500 edged up 8.96 points or 0.2 percent to 5,625.80.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the earnings news from Nvidia and the inflation data.

On the U.S. economic front, the Conference Board released a report unexpectedly showing a modest improvement by U.S. consumer confidence in the month of August.

The report said the Conference Board’s consumer confidence index rose to 103.3 in August from an upwardly revised 101.9 in July.

The increase surprised economists, who had expected the consumer confidence index to edge down to 100.1 from the 100.3 originally reported for the previous month.

Reflecting the lackluster performance by the broader markets, most of the major sectors ended the day showing only modest moves.

Telecom stocks showed a substantial move to the downside, however, with the NYSE Arca North American Telecom Index tumbling by 2.5 percent.

Significant weakness was also visible among housing stocks, as reflected by the 1.2 percent loss posted by the Philadelphia Housing Sector Index.

Energy stocks also saw notable weakness amid a steep drop by the price of crude oil, while semiconductor stocks regained ground after falling sharply on Monday.

Commodity, Currency Markets

Crude oil futures are slumping $1.14 to $74.39 a barrel after tumbling $1.89 to $75.53 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,528.90, down $24 compared to the previous session’s close of $2,552.90. On Tuesday, gold edged down $2.30.

On the currency front, the U.S. dollar is trading at 144.72 yen compared to the 143.96 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1107 compared to yesterday’s $1.1184.

Asia

Asian stocks ended mixed on Wednesday as investors eagerly awaited earnings from market darling Nvidia, which could affect shares of artificial intelligence and other prominent technology stocks.

Investors also awaited the release of the Federal Reserve’s preferred inflation gauge later this week for signals on U.S. interest rate reductions.

The dollar tried to regain some ground after having hit its lowest in more than a year against a basket of peers.

Gold dipped on dollar strength, while oil held steady after a dramatic drop in the previous session that halted a three-day winning streak.

China’s Shanghai Composite Index fell 0.4 percent to 2,837.43, with sentiment dented by weak corporate earnings and concerns over a renewed trade war between China and the west. Hong Kong’s Hang Seng Index slumped 1.0 percent to 17,692.45.

Japanese markets eked out modest gains as the yen dropped further following cautious remarks from Bank of Japan (BoJ) Deputy Governor Ryozo Himino.

Himino was quoted as saying that the central bank’s monetary policy has to consider numerous factors and that the imminent task is to closely monitor financial market developments with a high sense of urgency.

The Nikkei 225 Index edged up 0.2 percent to 38,371.76, while the broader Topix Index settled 0.4 percent higher at 2,692.12.

Seoul stocks ended little changed after a choppy session. The Kospi finished marginally higher at 2,689.83 after North Korea said it test-fired a 240mm multiple rocket launcher with a new “guiding system.”

Automakers posted strong gains, with Hyundai Motor surging 4.7 percent and its affiliate Kia Corp. jumping 2.8 percent.

Australian markets ended on a flat note after data showed inflation slowed to a four-month low in July but not fast enough to warrant early interest rate cuts.

Tabcorp Holdings plunged 15 percent after the company announced a significant non-cash impairment charge of $1.37 billion for its wagering business.

Woolworths jumped 3.3 percent after the grocer declared a special dividend and noted that improving customer scores, item growth, and lower inflation provide reason for optimism.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.2 percent to 12,470.60.

Europe

European stocks have advanced on Wednesday ahead of highly anticipated results from Nvidia later today and key U.S. inflation data on Friday. The highly anticipated earnings report from the AI darling will provide a key test for the AI demand story.

The pan European STOXX 600 Index is up by 0.4 percent at 521.00, hitting a one-month high.

The German DAX has climbed 0.8 percent and France’s CAC 40 is up by 0.5 percent, while the U.K.’s FTSE 100 is down by 0.2 as commodity-related stocks decline on concerns about slowing growth in the U.S. and China.

In corporate news, Swedish radiation therapy equipment maker Elekta has moved sharply higher after reporting strong quarterly results.

GSK has also jumped after a U.S. court decided to review whether evidence supporting claims that heartburn drug Zantac causes cancer is scientifically sound.

Insurer Prudential has also shown a strong move to the upside after its half-year results surpassed in several key areas.

Meanwhile, miners Anglo American, Antofagasta and Glencore have fallen as metals prices decline on demand concerns.

Hochschild Mining has also moved sharply lower despite posting strong first-half results on higher output and prices.

LEG Immobilien SE shares have also slumped. The German property company said that it is launching an offering of guaranteed senior, unsecured convertible bonds of 500 million euros due 2030.

The company intends to use the net proceeds to repay debt and for general corporate purposes.

U.S. Economic Reports

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended August 23rd at 10:30 am ET.

Crude oil inventories are expected to decrease by 3.0 million barrels after slumping by 4.6 million barrels in the previous week.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $70 billion worth of five-year notes

Atlanta Federal Reserve President Raphael Bostic is scheduled to speak on the economic outlook in a moderated conversation hosted by the Stanford Club of Georgia and the Stanford Black Alumni Association-Atlanta at 6 pm ET.