Wall St set to open higher with focus on Nvidia’s high-stakes results

WALL Street was set to open higher on Wednesday, with the spotlight firmly on Nvidia as investors wait to see if its results could reignite an artificial intelligence-powered rally in megacap growth stocks.

Rising bets that Nvidia’s revenue target will once again surpass Wall Street estimates pushed the chipmaker’s stock to a record high on Tuesday, but analysts also fear that a failure to match investor expectations could trigger a wider selloff.

Its shares were up 0.8% in premarket trading.

A blowout forecast from the company last quarter has been one of the biggest catalysts for the S&P 500’s 14% gain so far this year.

“When the market takes a focus on one stock, any disappointment could have a reverberation in the market,” said Andre Bakhos, managing member at Ingenium Analytics LLC.

Megacap growth stocks had stumbled in the first few weeks of August after signs of a still strong U.S. economy spurred worries that the Federal Reserve could keep interest rates elevated for longer, sending government bond yields surging.

“What we’re seeing is a realization that let’s not let the market run away here on the optimism of Nvidia, when we have a Jackson Hole speech on Friday (and) a Fed meeting in a month from now,” Bakhos said.

Tesla fell 2.1% after a report that the company lowered the production target of its German plant.

Supporting equities on Wednesday, the yield on the 10-year U.S. Treasury note slipped from near 16-year highs hit in the previous session.

Data showed

the interest rate on the U.S. 30-year fixed-rate mortgage last week shot to the highest since December 2000.

S&P Global’s flash U.S. Composite PMI index for August, due at 9:45 am ET, could provide additional clues on the path for interest rates ahead of a speech by Fed Chair Jerome Powell at Jackson Hole on Friday.

Traders’ bet of a rate hike pause by the Fed next month stands at 86.5%, according to CME Group’s FedWatch tool.

A slew of downbeat earnings reports also kept a lid on market sentiment. Sport retailers Nike and Under Armour fell 3.6% and 1.5%, respectively, after a downbeat profit forecast from Foot Locker, whose shares slumped 30.8%.

Shares of U.S. analog chipmakers NXP Semiconductors, Texas Instruments and ON Semiconductor slipped between 2% and 3% after Analog Devices reported lower quarterly revenue.

At 8:24 a.m. ET, Dow e-minis were up 34 points, or 0.1%, S&P 500 e-minis were up 6.5 points, or 0.15%, and Nasdaq 100 e-minis were up 25.5 points, or 0.17%.

Shares of drugmakers Gilead Sciences and Merck & Co advanced about 3% each after Swiss rival Roche inadvertently published positive lung cancer drug trial data.

Peloton Interactive shares plunged 27.8% after the fitness equipment maker pushed back its cash-flow positive target to 2024. – Reuters