What matters more to the stock market? The Fed or Nvidia?
There are plenty of data points arriving over the coming weeks that could trip up the runaway stock market.
On Friday, the
When stock investors look through the end of September, however, they are most focused on the news coming from just one company.
A financial report released next Wednesday by Nvidia, the chip producer, is expected to produce the S&P's biggest one-day reaction over the next month.
The forecast for that market move is reflected in recent options activity - derivatives that give an investor the right to buy or sell a stock, or an index of stocks, at a future date for a preset price. Investors use options to make bets on the direction of the market and to protect against the potential for the market to move against them.
According to S&P 500 options data from Citi Global Markets, investors are positioned for a 0.8-percentage-point move - in either direction - on Friday, depending on what the Fed chair,
Prices for next Thursday - the first chance investors have to react to Nvidia's earnings released the night before - imply a move in the index of 0.9 percentage points in either direction.
"On a relative basis, Nvidia's earnings is the largest event for the S&P 500 for the next month," said
"For equity investors," he added, "particularly in the S&P 500, the AI theme, and the impact of that on returns, is on par with the Fed now."
As Nvidia has grown, swelling to a
The last time Nvidia reported earnings, in May, its stock rose 3.25%, and the S&P 500 rose 0.4%. After reporting earnings in February, Nvidia sank more than 8%, and the S&P 500 dropped 1.6%.
Nvidia has led rivals in the race to dominate the high-powered chips used to power AI, and next week investors are looking for signs that the relentless demand for Nvidia's products will continue. The company's earnings could help answer another big question looming over the stock market: whether there is a bubble in AI, as some have speculated this week.
Other large companies in the index, like Apple and Microsoft, are also tied to the AI theme, so Nvidia's financial results are likely to affect these other big stocks as well.
"It's always a big deal," said
For comparison, when Powell spoke at
Powell's address this week could shift investors' expectations for monetary policy and cuts to interest rates, both of which are crucial inputs for modeling the path ahead for the economy and stock market.
The Trump administration has repeatedly complained about the
So far, the Fed has resisted, warning that rapidly lowering interest rates risks heating up the economy at the wrong time, potentially stoking inflation and raising prices for consumers.
This article originally appeared in The



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