Next week, all eyes will be on Nvidia as investors consider what’s next for the artificial intelligence industry. This week, stocks hit record highs and surpassed one milestone after another as inflation data cooled and investors worried that the Federal Reserve might keep interest rates higher for longer. The Dow Jones Industrial Average surpassed the 40,000-point mark for the first time in history. The S&P 500 also exceeded 5,300 points for the first time. The S&P 500 index set a new closing record after setting a closing record in 2024. All time high. The S&P 500’s best-performing sector this quarter was utilities, up 9%, followed by communications services, up 4%. The worst-performing industry was consumer discretionary, which fell more than 2% and included large-cap stocks Amazon and Tesla. But Nvidia’s earnings report on Wednesday could revive the deal, which still has the power to drive markets higher and is backed by investors motivated by the transformative potential of artificial intelligence. The $2.3 trillion company, the third-largest stock in the S&P 500 by market cap, is expected to gain about 8%, meaning the stock could rise or fall by that percentage in its quarterly report. In other words, the results could be a market-moving event given the chipmaker’s sheer size and popularity. Jay Woods, chief global strategist at Freedom Capital, said, “Nvidia will be a stock that won’t be as boring as this rally because when utilities lead and financials lead, they don’t. Will make headlines. “Nvidia is a headline maker, so I can’t wait to see how the market reacts to this. NVDA YTD Peak Nvidia For investors, the results could help the major index continue higher or dent its momentum. The 30-stock Dow Jones posted its fifth straight weekly gain on Friday, the first since February. A streak of gains not seen since. The S&P 500 and Nasdaq both posted fourth straight weekly gains. Market Movers By now, investors have become accustomed to Nvidia reporting earnings that beat expectations. The report’s expectations are ridiculously high. In fact, Piper Sandler’s Harsh Kumar has a buy rating on the stock, saying he expects the chip maker to top revenue expectations by $1.5 billion to $2 billion in its upcoming report. Noting that Nvidia’s revenue has grown by an average of $1.9 billion over the past three quarters, Kumar expects that means the market may take it in stride if the chipmaker meets or slightly exceeds expectations, however. Most important to investors is any details CEO Jen-Hsun Huang might share about future demand for Nvidia’s products, Kumar said, although the company’s latest generation AI graphics processor, Blackwell, is expected to be “much better” than its competitors. Investors are looking for signs that demand continues to be strong and orders remain healthy, with the potential to boost not only Nvidia but also the broader artificial intelligence industry, as the software name has taken more of a backseat recently. “This is a new catalyst for the theme,” said Zachary Hill of n Investments. ) Investment chief Chris Zaccarelli said he could see a broader market selloff of “more than 1%” if Nvidia’s information spooks investors — in fact, 1.5%, 2%, or “worse” — mostly because the chipmaker occupies a place in their imaginations. There is excitement about the new era of artificial intelligence computing. This week’s earnings report was more upbeat. No matter how Nvidia’s stock performs after the company’s earnings, investors expect the long-term outlook to remain intact, with many anticipating any dip in the stock price to be quick to buy. Nvidia is up nearly 87% this year, but is up just 2% this quarter. “Regardless of how they perform, I still think in the long run this should be in everyone’s portfolio to some extent,” Liberty Capital Markets’ Woods said. “This is the leading artificial intelligence play.” Maintaining record highs Nvidia’s profits will also serve as a key catalyst, with technicians watching to see whether stocks can maintain the record levels set this week. Fairlead Strategies’ Katie Stockton said she’s watching to see if the S&P 500 can hold above resistance at 5,260 by next Friday, confirming the breakout, which would be a bullish development for stocks. But the technician is also concerned that there could be further weakness ahead, citing mixed signals in the momentum indicator. “Certainly from a momentum perspective, short-term indicators will be higher, but medium-term indicators will mostly be lower,” Stockton said. “So we still think the market is vulnerable to another downside impact from the correction phase that began in April. “We’re watching and waiting to see how it plays out,” Stockton added. One week ahead calendar all times are Eastern Time. There were no events of note on Monday, May 20. Earnings: Palo Alto Networks There were no major events on Tuesday, May 21st. Earnings: AutoZone, Lowe’s Companies Wednesday, May 22, 10 a.m. Existing Home Sales (April) 2 p.m. FOMC Minutes Earnings: Nvidia, TJX Cos., Analog Devices, Target, Raymond James Thursday, May 23, 8 a.m. Construction License 8:30 AM Chicago Fed National Activity Index 8:30 AM Continuing Jobless Claims 8:30 AM Initial Jobless Claims 9:45 AM PMI Initial Composite Index 9:45 AM S&P PMI Manufacturing Initial Value 9:45 AM S&P PMI Services Sector Flash 10 AM New Home Sales 11 Kansas City Fed Manufacturing Index Earnings: Intuit, Ralph Lauren Friday, May 24 8:30 AM Durable Orders — CNBC’s Nick Wells contributed to this report made a contribution.
