Nvidia at turning point: Market maker or breaker? 26/02/2025

HOT stories for today

US market wrap:
 

• Stocks struggled in the latest session, with the S&P 500 sliding 0.5% and the Nasdaq Composite dropping nearly 1.4%, marking their fourth straight day in the red. The Dow, however, bucked the trend, edging up around 0.4%. A weaker-than-expected consumer confidence report from the Conference Board weighed on markets Tuesday.
• Disappointing retail sales and soft consumer sentiment data have fueled economic concerns over the past week, dragging down major indexes. Inflation fears, economic uncertainty, and new Trump administration policies have kept selling pressure high across stocks, crypto, and most assets—except for treasury bonds, which continue to act as a safe haven. On a brighter note, Home Depot’s earnings offered a glimmer of hope for the housing market, as the retailer reported its first positive comparable sales growth in more than two years.

Nvidia at turning point: Market Maker or Breaker?
 

• Nvidia reports earnings today, and if it stumbles, the broader market could follow. Analysts expect $38 billion in Q4 sales, capping off two years of explosive AI-driven growth. However, concerns are mounting as major customers like Microsoft and Google reassess spending, and breakthroughs in China suggest AI may need fewer Nvidia chips.
• CEO Jensen Huang will address these fears, arguing that AI’s evolution demands even more GPU power. With hyperscalers still investing billions, Nvidia’s outlook will be a key market barometer—any misstep could shake tech and beyond. The stock has flattened in recent months, making today’s report crucial for its trajectory. A strong earnings beat could reignite investor confidence, but any weakness may accelerate the recent pullback.

 
Stocks on the move:       

• Super Micro Computer (SMCI) – The struggling server manufacturer soared over 20% in after-hours trading after submitting long-awaited financial reports to the Securities and Exchange Commission. The company filed its updated and audited fiscal 2024 report, along with statements for the first two quarters of fiscal 2025. Nasdaq had given Super Micro until February 25 to comply or risk delisting.
• Workday (WDAY) – Shares of the human resources software provider jumped 7% after reporting fourth-quarter adjusted earnings of $1.92 per share on revenue of $2.21 billion.
• Intuit (INTU) – The TurboTax software maker climbed 4% after delivering fiscal second-quarter results that exceeded Wall Street expectations, posting adjusted earnings of $3.32 per share on revenue of $3.96 billion.
• Cava Group (CAVA) – The restaurant chain’s stock declined more than 7% following a fourth-quarter earnings miss. Cava reported adjusted earnings of 5 cents per share, falling short of analysts' estimates of 6 cents per share, according to LSEG.
• Jack in the Box (JACK) – The fast-food chain surged over 10% after reporting fiscal first-quarter operating earnings of $1.92 per share, beating analysts' projections of $1.69 per share, according to FactSet.

Today’s action

• Asia-Pacific markets showed a mixed performance on Wednesday as two major Wall Street indices declined overnight following a significantly weaker-than-expected U.S. consumer confidence report. Hong Kong’s Hang Seng index rose 2.38%, driven by consumer and technology stocks after the city's budget announcement included a pledge to position itself as an artificial intelligence hub, allocating 1 billion Hong Kong dollars for AI research and development. The Hang Seng Tech index jumped 3.63%, fueled by strong gains in JD.com (7.64%), Xpeng (6.30%), and Alibaba (5.9%).
• U.S. stock futures edged higher Tuesday evening after the S&P 500 extended its losing streak to four consecutive sessions. Futures linked to the Dow Jones Industrial Average rose 85 points, or 0.2%. Nasdaq-100 futures gained 0.4%, while S&P 500 futures increased 0.3%. Investors are closely watching Nvidia’s earnings, considered a key market indicator, along with results from Lowe’s, TJX, and Salesforce, all set to report Wednesday. On the economic front, data releases for new home sales and building permits are due Wednesday, but the highlight of the week will be Friday’s personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation.

Wahtclist: SMCI, NVDA, CAVA, JACK, INTU, WDAY, LOW, CRM

Bitcoin

• Bitcoin’s price took a sharp downturn over the past 24 hours, falling below $88,000 for the first time since mid-November. Altcoins suffered even steeper losses, with major assets like ETH, XRP, DOGE, ADA, LINK, and AVAX posting double-digit declines. Just last Friday, BTC had rebounded from a dip to $93,500 and was approaching the $100,000 mark. However, a hack targeting Bybit abruptly halted its momentum, triggering a broader market decline.
• After a relatively stable weekend around $96,500, BTC slipped to $94,000 on Monday despite a multi-billion-dollar purchase from Strategy. The selloff intensified on Tuesday morning, sending bitcoin below $88,000 on Bitstamp—its lowest level since November 15, shortly after the U.S. elections. BTC briefly attempted to reclaim $90,000 but faced rejection and now struggles to regain footing above $88,000.
  Watchlist: Bitcoin: 88 000-109 500, Ethereum: 2200-3000, Solana: 133-276

Forex

• EUR/USD slips as the US dollar strengthens, with the DXY approaching 106.50, fueled by rising Treasury yields. The dollar had faced pressure from weaker US consumer confidence but regained momentum, weighing on the euro. Meanwhile, optimism surrounding Germany's potential €200 billion emergency defense fund provided some support for the euro. EUR/USD retreats from its previous session’s gains, hovering around 1.0500 during Asian trading hours.
• USD/JPY climbs to 149.30, gaining 0.23% for the day as the dollar advances. However, a risk-off mood and growing speculation of further rate hikes by the Bank of Japan could strengthen the yen and limit the pair’s upside. Investors are also keeping an eye on speeches from Federal Reserve officials Bostic and Barkin later in the day, which may influence market sentiment.
  Watchlist: EUR/USD: 1.0200-1.0650, USD/JPY: 149-158.80

Basic Materials

• Gold edges higher in early European trading on Wednesday as trade war concerns drive safe-haven demand. Uncertainty surrounding President Trump's tariff plans continues to support the precious metal after it hit a one-week low in the previous session. Investors now await US January new home sales data and comments from Federal Reserve officials later in the day.
• Meanwhile, WTI crude oil hovers around $69.00 in the early Asian session, facing selling pressure amid concerns over weaker energy demand and the impact of Trump’s proposed tariffs. US crude oil inventories declined by 640,000 barrels last week, according to API data, but this failed to provide significant support to prices. Analysts suggest that Trump’s tariff push has fueled inflation concerns at the Federal Reserve, potentially prompting the central bank to keep interest rates elevated for longer. This could limit gold’s upside, as higher rates typically reduce the appeal of non-yielding assets like gold.
  Watchlist: GOLD 2600-2945, US Oil: 69.00-79.00

Key Economic Events Today:

EST time
08:30 am: USD FOMC Member Barkin Speaks
10:00 am: USD New Home Sales
10:30 am: USD Crude Oil Inventories 
12:00 pm: USD FOMC Member Bostic Speaks

Earnings

BMO (Before the US Market opens)

TJX            TJX Companies
LOW          AmeriLowe’s Companies
BUD           Anheuser- Busch Inbev

AMC (After the US Market closes): NVDA, SNOW, CRM

The TEFS Analyst team wishes you a successful day!