Markets Await Crucial Nvidia Results Amid Economic Data Tensions

U.S. stock index futures remained muted as investors anticipated Nvidia's earnings and crucial economic data. Concerns revolve around Nvidia meeting expectations amidst strong AI industry momentum. Other factors includes shifts in investor focus, indecision about Fed's rate cut, and various corporate movements affecting the market.

On Tuesday, U.S. stock futures were relatively stagnant as markets braced for Nvidia's earnings and key economic data expected later this week.

The S&P 500 and Nasdaq paused from their previous rally, largely due to tech stock sell-offs and investor attention shifting to Nvidia's upcoming report. Nvidia shares, key drivers in the recent bull market, showed minor gains ahead of the results which are anticipated to reveal revenue more than doubling. Even a minor miss could negatively impact shares.

Investor concerns lie in Nvidia's ability to meet high expectations amid increased AI spending by its top clients. Peter Garnry, Saxo's chief investment strategist, noted Nvidia's earnings to be a pivotal event in global equities. Alongside Nvidia, other chip stocks like Broadcom fell, while Advanced Micro Devices saw slight gains following a decline in the Philadelphia SE Semiconductor index.

At 7:24 a.m. ET, Dow e-minis were down 31 points, S&P 500 e-minis fell 3.25 points, and Nasdaq 100 e-minis dropped 3 points. A recent rally saw the Dow close at a record high, while the S&P 500 neared its own milestone. Investors are divided on expectations regarding a potential Fed rate cut in September, with prevailing odds favoring a 25-basis point cut. Senior market analyst at Capital.com, Daniela Hathorn, connected the market's slow momentum to uncertainty about the Fed's next move.

U.S. consumer confidence numbers for August will be reported at 10 a.m. ET, but the primary focus is on the July Personal Consumption Expenditure data set for release on Friday. UBS Global Wealth Management raised U.S. recession predictions from 20% to 25%, attributing the change to revised job growth estimates and the July labor report indicating weakness in wage-determining factors.

In corporate movements, Paramount Global shares dropped following Edgar Bronfman Jr's withdrawal from leadership contention, clearing Skydance Media's path. JD.com's U.S. shares rose after sanctioning a $5 billion repurchase. Hershey shares declined following a downgrade from Citigroup.

(With inputs from agencies.)