U.S. stock futures were little changed on Wednesday as investors avoided making major bets ahead of Nvidia’s (NASDAQ:NVDA) second-quarter results, which are scheduled for release after the closing bell.
The AI chipmaker’s numbers and outlook are expected to play an important role in determining sentiment across the technology sector, particularly amid growing questions over the sustainability of heavy spending on artificial intelligence infrastructure.
“Assuming there is no major movement in either a positive or negative direction in geopolitical terms, tonight’s second quarter results from Nvidia are likely to set the tone for markets through the remainder of the week,” said AJ Bell investment director Russ Mould.
He added, “Investors typically assume Nvidia will always beat expectations, so the AI chip giant will have to produce or say something very special to truly impress the market.”
U.S. PCE inflation slightly exceeds forecasts
Investors also digested fresh inflation figures from the Commerce Department, although the data generated little immediate movement in futures.
The headline personal consumption expenditures price index increased 0.2% in July following a 0.1% decline in June. Economists had forecast a 0.1% monthly increase.
Annual PCE inflation remained unchanged at 3.7%, slightly above expectations for a moderation to 3.6%.
Core PCE, excluding food and energy, increased 0.2% from June, matching forecasts after a 0.1% rise in the previous month. On a yearly basis, core inflation held at 3.3%, in line with expectations.
The PCE measures form part of the Commerce Department’s personal income and spending report and are closely watched by the Federal Reserve when assessing inflationary pressures.
Falling oil prices support Wall Street
Tuesday’s session ended positively for the major U.S. indices, although stocks surrendered some of their stronger early gains.
The Nasdaq rose 171.11 points, or 0.7%, to 26,151.80, while the S&P 500 advanced 24.42 points, or 0.3%, to 7,677.28. The Dow Jones Industrial Average gained 160.24 points, or 0.3%, to finish at 53,577.40.
A continued slide in crude oil prices helped underpin sentiment. U.S. crude futures dropped more than 3% on Tuesday after already falling by more than 2% during Monday’s session.
Oil extended its decline following the Treasury Department’s announcement of “Operation Economic Outcast,” which it described as an unprecedented government-wide economic campaign targeting Iran and its “enablers.”
Washington imposed sanctions on almost 60 entities, individuals and vessels that it said “enable the Iranian regime’s recklessness.” However, traders appeared encouraged that the measures did not immediately include secondary sanctions against countries continuing to facilitate Iranian trade.
Markets also interpreted the Trump administration’s emphasis on economic pressure as potentially reducing the likelihood of an imminent return to a full-scale military campaign.
Lower crude prices helped Treasury yields continue their retreat, providing another supportive factor for equities.
U.S. consumer confidence deteriorates
Separate economic figures showed that consumer confidence weakened during August.
The Conference Board’s consumer confidence index declined to 89.4 from a downwardly revised 90.2 in July.
Economists had expected a reading of 90.1, compared with the previously reported July level of 90.8.
The softer reading reflected deteriorating consumer expectations and added another sign of caution surrounding the outlook for the U.S. economy.
Hardware and gold shares outperform
Computer hardware stocks were among Tuesday’s strongest areas of the market, with the NYSE Arca Computer Hardware Index climbing 3% after several sessions of pronounced weakness.
Gold-related equities also performed strongly, sending the NYSE Arca Gold Bugs Index 2.3% higher.
Airlines, brokerage firms and semiconductor stocks recorded notable gains, while oil producers came under pressure as crude prices continued to retreat.
With Nvidia’s (NASDAQ:NVDA) results approaching, however, investors appear reluctant to push the broader market decisively in either direction. Attention is also turning toward the Jackson Hole Economic Policy Symposium for further clues about the Federal Reserve’s policy outlook.
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