NEW YORK – Investors are eagerly awaiting the opening of Dow Jones futures on Sunday evening, as well as the S&P 500 and Nasdaq futures, with a keen eye on Nvidia (NVDA) ahead of its upcoming earnings. The stock market rally managed to hold steady despite reports of hot inflation, with the Nasdaq experiencing a solid decline but remaining above weekly lows. The S&P 500 and Dow Jones also saw modest declines, while the Russell 2000 had a strong week, hovering near 52-week or all-time highs.
The highly anticipated Nvidia earnings on Wednesday are expected to be a critical test for the AI-led market rally. The impact of Nvidia’s earnings and guidance on NVDA stock is expected to be significant, potentially affecting other major players in the tech and AI space, including Advanced Micro Devices (AMD), Arm Holdings, Taiwan Semiconductor, Broadcom, Palantir Technologies, Microsoft, and Alphabet.
However, concerns about overheating in the AI sector have been raised, particularly with Super Micro Computer, which saw a substantial sell-off after a rapid surge in its stock price. This has led investors to reassess their exposure not only to Nvidia, but also to the AI sector overall. With the Nasdaq nearing overextension and bullish sentiment high, caution is advised for new investments, with a focus on defensive strategies.
Nvidia and Arm stock are currently featured on IBD Leaderboard and the IBD 50 list, while Nvidia stock is also on SwingTrader. The market rally’s weekly action was analyzed in a video embedded in the article, providing insight into the performance of Super Micro stock, Lennar, and Weatherford International.
As Dow Jones futures open on Sunday at 6 p.m. ET, it’s worth noting that U.S. markets will be closed on Monday for the Presidents Day holiday, while other markets around the world will remain open. Overnight action in Dow futures and elsewhere may not necessarily translate into actual trading during the next regular stock market session.
The recent performance of the stock market rally, despite some notable declines, reflected improved market breadth and strength in several sectors. However, concerns about potential overextension in the AI and tech sectors, along with highly bullish sentiment, have prompted investors to carefully consider their investment strategies and positions. With Nvidia earnings on the horizon, the potential impact on the broader tech industry and related stocks is a key factor for investors to consider.