Wednesday Watch: Investors Await Fed Minutes, Nvidia Earnings For Market Direction

Investors are setting their sights on two pivotal events scheduled for Wednesday. At 2:00 p.m. ET, the Federal Reserve will release the minutes from its latest Federal Open Market Committee Meeting. Following the close of Wall Street’s trading session, Nvidia Corp., the S&P 500’s top performer, is slated to announce its quarterly results.

Fed Minutes: What To Expect

In its January policy meeting, the Federal Reserve opted to maintain interest rates steady, within the range of 5.25% to 5.5%, largely aligning with market forecasts.

The Fed’s statement highlighted that the economy is growing at a solid pace, with job gains, though moderated, remaining strong and the unemployment rate persisting at low levels. Inflation, while having decelerated over the past year, continues to be elevated.

Notably, the Fed removed any mention of “additional policy firming,” hinting at a halt in rate increases. Yet, it underscored the unlikelihood of reducing the target range until there’s more confidence in inflation trending sustainably towards the 2% goal.

Federal Reserve Chair Jerome Powell‘s press conference remarks pushed back against a premature rate cut in March, reinforcing a data-dependent policy approach.

January’s FOMC minutes are expected to reinforce a wait-and-see stance on inflation, affirming the Fed’s positive assessment of the labor market and emphasizing the need to maintain the current interest rates until there’s substantial assurance of achieving the 2% inflation target.

It’s crucial to remember that even if the Fed minutes reveal a stance that’s marginally less aggressive than what Powell communicated during his press briefing, the subsequent stronger-than-anticipated CPI data and the more robust job market figures post the January FOMC minutes could serve as solid grounds for Fed officials to continue endorsing the existing monetary policy strategy.

Nvidia Earnings: What To Expect?

The AI-driven chipmaker giant, whose market cap has recently surged to $1.8 trillion, is poised to release its January 2024 quarter results post-Wednesday’s market close, with expectations set high by analysts and investors alike.

Wall Street’s median analyst anticipates a significant EPS jump to $4.59, an over fivefold increase year-over-year, alongside a revenue surge to $20.40 billion, up 240% from the previous year.

With a year-to-date stock price increase of 40% and a staggering 230% rise from last year, Nvidia’s financial health and future projections are under the microscope.

Key areas of interest include its performance in China, echoing concerns similar to those for Apple Inc. AAPL, and its strategic focus on AI-driven growth for 2024.

Despite a 12-month average price target of $741.56 for Nvidia stock, suggesting a modest 7% growth potential, the company’s forthcoming guidance will be critical for sustaining its impressive market momentum.

Chart: NVIDIA Soars Well Above Moving Averages In Stunning Growth Display

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Image created with a photo from International Monetary Fund on Flickr