Key Points
- S&P 500 trades at 6,474.72, little changed, just shy of resistance at 6,480.84.
- Nvidia earnings expected to drive market direction, with options pricing a $260B swing.
U.S. stock index futures were flat on Wednesday as traders stepped aside ahead of Nvidia’s highly anticipated earnings report, a release expected to shape Wall Street’s near-term direction.
Nvidia has been at the centre of the equity rally since April’s lows, crossing the $4 trillion market capitalisation mark in July to become the world’s largest company on the back of relentless AI demand.
The results come as valuations in the tech sector sit well above long-term averages. Concerns over overheating grew after OpenAI’s Sam Altman warned of a potential “AI bubble,” while an MIT study suggested that productivity benefits from AI tools may not translate directly into higher corporate earnings.
Nvidia’s China sales will be under the microscope after this year’s Sino-U.S. trade war and a controversial profit-sharing deal with the U.S. government.
Options markets are pricing in a $260 billion swing in valuation, underscoring the stakes.
Beyond Nvidia, politics have also unsettled sentiment. President Trump’s attempted dismissal of Fed Governor Lisa Cook raised questions about the central bank’s independence.
Traders, however, continue to price in a 25bp Fed cut in September, with attention turning to Richmond Fed President Thomas Barkin’s comments later today for further policy signals.
Technical Analysis
The S&P 500 (SPX) has extended its recovery strongly from April’s low of 4,802, reaching a fresh high near 6,480 before easing slightly to 6,474.
Price action remains firmly above its 30-day moving average, and both the 5- and 10-day averages continue to track higher, confirming strong bullish momentum.
The MACD is still positive, though its histogram has flattened, suggesting upward momentum is slowing after a sustained multi-month rally.
Key resistance lies around 6,480–6,500, where price has recently stalled. A breakout above this zone could open the way for another leg higher toward 6,600.
On the downside, first support sits around 6,350, followed by 6,200 if selling deepens. The broader trend remains bullish, but traders should watch for short-term consolidation or profit-taking after the sharp run-up.
Cautious Forecast
If Nvidia delivers a blowout quarter, the S&P 500 could break higher toward 6,500–6,550. A disappointing report, however, risks triggering profit-taking across tech, with a pullback toward 6,400 likely in the short term.
