Futures Rally on Nvidia Despite Fed Minutes and Debt Ceiling Worries

Futures Rally on Nvidia Despite Fed Minutes and Debt Ceiling Worries

U.S. stocks fell for the second day in a row as negotiations over raising the debt ceiling continue to weigh on sentiment. The Dow Jones fell over 200 points along with the S&P 500 and Nasdaq following suit. We could see a nice rally off the back of strong earnings from Nvidia if any positive news comes out of debt-ceiling talks between Biden and McCarthy.


Nvidia Beats Earnings

AI stocks have been supporting the Nasdaq all year and that doesn’t look to stop as Nvidia Corp. (NVDA) beats on revenue and EPS along with issuing guidance for next quarter of $11 billion in revenue, well above the $7.18 billion analysts were expecting. This puts Nvidia on track to be the next trillion-dollar company with its stock up roughly 25% after hours.

Futures rallied on this news and other semiconductor stocks like Marvell Technology Inc. (MRVL) and Advanced Micro Devices Inc. (AMD) traded higher on the back of Nvidia’s results.


Key Economic Data

Investors will be watching for key economic data on Thursday. The Labor Department will release the weekly jobless claims report, and the Commerce Department will release GDP growth numbers for the first quarter.

Yesterday we saw the Minutes from the last Federal Open Market Committee meeting were released... and that unfortunately didn’t provide the much-needed guidance the market needed. Fed officials were divided on where to go with interest rates. Some members saw the need for more increases, while others expected a slowdown in growth to remove the need to tighten further.

In other news, Fitch Rates has had enough of the grandstanding going on around the debt-limit negotiations and said it may downgrade US credit rating to reflect the worsening political standoff that’s preventing a deal to solve the nation’s debt ceiling crisis.