Nvidia’s long-awaited earnings could test a market that has yet to fully recover from this month’s pullback. Deutsche Bank’s Henry Allen called the report, due Wednesday after the bell, “one of the most important events” on the macro calendar this year. He said the quarterly figures even rival the U.S. jobs and consumer price index reports — two of the most widely tracked data sets by investors — in terms of importance. Due to this, and its massive market cap, Nvidia could dictate which way the market goes. It has happened before. In February, the S & P 500 rallied 2.11% for its second-best daily performance of 2024 on the back of a 16% postearnings rally for Nvidia. NVDA YTD mountain Nvidia “Whatever the blockbuster is after the close, the market will pay close attention to NVDA’s stock move and its impact on the broader market, specifically in correlation,” wrote Ben Emons, investment chief at Fed Watch Advisors. A quick calculation can illustrate the connection between the move in Nvidia’s stock price to any moves in the broader market. Nvidia, which is expected to move roughly 10% in either direction based on current options prices, represents roughly 7% of the S & P 500. This would equate to a roughly 1% change in the broader market index, per Emons. A review of the one-day performance following Nvidia’s recent quarters show mixed results when comparing Nvidia’s stock move to changes in the S & P 500. In May, Nvidia rallied 9%, while the broader index lost 0.7%. Regardless, the chipmaker is making its influence increasingly felt. Bank of America, for example, noted that Nvidia has a high correlation to how the stock market performs two weeks after its report.
