Wall Street Week Ahead — ‘Super Bowl’ Nvidia earnings stand to test searing AI trade

New York —

The rally in U.S. stocks faces an important test […] with earnings from chipmaking giant Nvidia NVDA.O, whose blistering run has powered markets throughout 2024.
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The S&P 500.SPX has pared a sharp drop it suffered after U.S. economic worries contributed to a sell-off at the beginning of the month and again stands near a fresh all-time high.

Nvidia, whose chips are widely seen as the gold standard in artificial intelligence, has been at the forefront of that rally, jumping by more than 30% since its recent lows. The stock is up some 150% year-to-date, accounting for around a quarter of the S&P 500’s 17% year-to-date gain.

The company’s Aug. 28 earnings report, coupled with guidance on whether it expects corporate investments in AI to continue, could be a key inflection point for market sentiment heading into what is historically a volatile time of the year. The S&P 500 has fallen in September by an average of 0.78% since World War Two, the worst performance of any month, according to CFRA data.