[New York Stock Market] 'AI Leader' Nvidia Ends Mixed Near Steady Ahead of Earnings

NVIDIA to Announce Earnings After Market Close
"More Important to Year-End Market Than December FOMC"

The three major indices of the U.S. New York Stock Exchange closed mixed in the early session on the 20th (local time) after trading near flat. Amid heightened geopolitical tensions following Ukraine's missile attack on Russian mainland the previous day, investors remained cautious, awaiting the release of Nvidia's earnings after the market close.

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On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 43,408.47, up 139.53 points (0.32%) from the previous trading day. The large-cap S&P 500 index rose slightly by 0.13 points (less than 0.1%) to 5,917.11, while the tech-heavy Nasdaq index fell 21.33 points (0.11%) to close at 18,966.14.

All investor attention was focused on Nvidia's scheduled earnings announcement. Nvidia's results are seen as a catalyst that could determine the major direction of the stock market for the remainder of the year. Barclays considers Nvidia's earnings report more important for the year-end market than the Federal Reserve's interest rate decision next month. Wall Street is particularly watching the demand outlook for Nvidia's latest artificial intelligence (AI) chip, Blackwell. If Nvidia delivers better-than-expected earnings and guidance, it could provide a rebound opportunity for the market, which has been in a lull since the 'Trump rally.'

Ryan Detrick, Chief Market Strategist at Carson Group, said, "Anxiety over Nvidia's earnings and the heightened political tensions between Russia and Ukraine are causing investor concerns. However, we must not forget that stocks are still having a historic year and the economy is not showing signs of recession."

Chris Senek, strategist at Wolfe Research, explained, "Like most investors, we will closely monitor Nvidia's earnings report today to gain clues about how AI spending is returning." He added, "We believe that if negative news or disappointing spending trends are confirmed, it could delay or even reverse the year-end stock price surge."

The market has lowered expectations for a rate cut next month following Federal Reserve Chair Jerome Powell's indication last week of a slowdown in rate hikes. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market on this day priced in a 52% chance that the Fed will cut rates by 0.25 percentage points at the December Federal Open Market Committee (FOMC) meeting, down from 82.5% a week ago. The probability of a rate hold next month rose from 17.5% a week ago to 48% on this day.

By individual stocks, retailer Target plunged 22% due to disappointing earnings and a downward revision of its annual outlook. Other retailers Dollar Tree and Dollar General fell 2.61% and 4.22%, respectively. Global media company Comcast rose 1.58% after announcing plans to spin off MSNBC and CNBC, a process expected to take about a year. Nvidia, which reports earnings after the market close, declined 0.76%. Ford, which announced plans to cut an additional 4,000 jobs in Europe, dropped 2.9%.

Following Ukraine's missile launch against Russia the previous day, demand for safe-haven assets surged, causing bond yields to fall. However, bond yields rose on this day. The U.S. 10-year Treasury yield, a global benchmark for bond yields, increased by 3 basis points (1bp = 0.01 percentage points) to 4.41%, while the 2-year Treasury yield, sensitive to monetary policy, rose 4 basis points to around 4.31%.

International oil prices declined. West Texas Intermediate (WTI) crude fell $0.52 (0.75%) to close at $68.87 per barrel, while Brent crude, the global oil price benchmark, rose $0.50 (0.68%) to close at $72.81 per barrel.