Nvidia's $92B revenue test looms as Wall Street futures hold flat

Wall Street faces a rare double test Wednesday as Nvidia's quarterly results and the Fed's preferred inflation gauge land on the same day.

US stock futures were little changed Wednesday as Nvidia's earnings and the Federal Reserve's preferred inflation gauge loomed, with Nasdaq 100 futures slipping 0.25 percent and Dow futures hovering near flat.

"A 0.1% or 0.2% m/m reading would reduce the pressure on FOMC Chairman Kevin Warsh and Company to raise interest rates immediately, likely weighing on the US dollar and boosting risk assets like major stock indices," said Matt Weller, global head of research at StoneX.

Nvidia is expected to report second-quarter revenue of about $92 billion, a 97 percent year-over-year increase, with earnings per share near $1.01, according to analyst consensus cited by Motley Fool and Yahoo Finance. The July core PCE index, due at 8:30 a.m. ET, is forecast to rise 0.2 percent month over month and hold at 3.3 percent year over year, while headline PCE is seen easing to 3.6 percent from 3.7 percent.

The convergence of the two releases creates a critical inflection point for equities. A stronger-than-expected inflation reading could reinforce concerns about sticky prices and limit the Fed's room to ease, while Nvidia's results will signal whether the artificial intelligence investment cycle remains intact. The Fed has held rates at 3.5 percent to 3.75 percent for five consecutive meetings, and traders price 40 percent odds of a hike at the September 16 FOMC meeting.

Core PCE Stays Sticky Above Fed's 2% Target

Core PCE has run above the Fed's 2 percent target for 65 consecutive months, according to Reuters, and economists expect the July reading to mark another month of elevated inflation. The details within the report will matter — service prices, housing-related costs and financial services will determine whether underlying inflation is broadening or reflecting temporary distortions, Weller noted. Consumer spending also bears watching after real consumption increased 0.4 percent in June. Energy prices, pushed higher by Middle East tensions around the Strait of Hormuz, remain a potential risk to the disinflation path, according to TradingKey. July CPI and PPI data showed no significant re-acceleration of inflation, with producer prices flat month over month, which has lowered market bets on a near-term Fed hike.

Nvidia's AI Test Carries Market-Wide Weight

Nvidia's results carry outsized importance given its dominance in AI chips and data center infrastructure. A significant beat or miss could drive substantial moves in the Nasdaq, S&P 500 and AI-related stocks. The company's data center revenue and forward guidance will be the key operating metrics investors scrutinize, with Wall Street still bullish on the stock despite a seven-day slide, according to TradingKey. The earnings report comes as the AI investment cycle faces its first major test of whether hyperscaler spending on Nvidia's GPUs can sustain the growth rates priced into the sector.

Across asset classes, EUR/USD is holding just above previous-resistance-turned-support in the 1.1660 area, with the technical outlook constructive above the 200-day moving average. Gold, trading at elevated levels, could challenge $4,700 on a soft inflation print or face profit-taking toward $4,600 on a hot reading, according to TradingKey analysis. US Treasury yields will be the transmission mechanism — lower yields would support high-valuation growth stocks, while rising yields would pressure tech. The dollar's direction hinges on the same data, with a hot reading strengthening the case for further Fed hikes and a soft print weighing on the greenback.

The outcome of Wednesday's double test will shape positioning into the September FOMC meeting and Fed Chair Kevin Warsh's Jackson Hole speech Friday. A soft PCE reading combined with strong Nvidia results could extend the recent equity rally, while a hot inflation print and disappointing guidance would likely trigger a rotation out of growth names.

This article is for informational purposes only and does not constitute investment advice.