Nvidia Earnings Will Impact Stocks More Than Powell's Speech

As summer draws to a close, Nvidia has emerged as a focal point for investors, with its upcoming earnings report set to be a significant market catalyst. According to Bank of America, the tech giant's results next week are expected to overshadow Federal Reserve Chair Jerome Powell's speech at Jackson Hole. The market has already priced in a potential one percentage point rate cut in 2024, making it challenging for Powell to adopt a more dovish stance than what investors anticipate. On Monday, stocks experienced a rise, fueled by optimism that Powell may indicate an imminent rate cut. Historically, the broader index has shown a median weekly gain of 0.80 percentage points since 2010. Ohsung Kwon, an equity and quant strategist at Bank of America, noted that with rate cuts already factored into the market, the impact of Powell's speech may be limited as investors await Nvidia's earnings for clearer insights into economic growth. Nvidia's earnings are expected to be a key indicator for both the company and the broader market, as investor focus shifts from inflation to growth. Kwon emphasized that as long as growth remains stable, equities can endure a less dovish Fed. Despite Nvidia's impressive 150% rise this year, the stock has seen only a 5% increase this month following a tech sell-off, although it has rebounded significantly since early August. Retail investors have been particularly active, buying the dip in Nvidia shares, which were up 2% on Monday, reflecting ongoing confidence in the company's long-term prospects.