By Scott Kanowsky | Investing.com
Investing.com -- All eyes are on Nvidia, with the chipmaker and AI darling set to release second quarter earnings after the close of U.S. trading on Wednesday. Meanwhile, Richmond Fed President Thomas Barkin raises the prospect of a "reacceleration scenario" in the American economy as central bankers from around the world prepare to congregate for a key economic symposium this week in Jackson Hole, Wyoming.
1. Eagerly awaited Nvidia results on deck
Earnings season may be gradually winding down, but investors still have major results to examine, including the latest quarterly figures from chipmaker Nvidia (NASDAQ:NVDA). The California-based company, which manufactures the graphics processors that power generative artificial intelligence, has been at the center of global euphoria around the development of the nascent technology.
Shares in Nvidia have tripled this year, thanks in large part to a stellar forecast in May that propelled the stock's market capitalization to above $1 trillion - a valuation approaching tech industry behemoths like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL). The announcement initiated a fresh wave of hype around AI's potentially game-changing applications, an excitement that in turn pushed up other Big Tech players and drove a broader stock market rally earlier this summer.
For these reasons, analysts claim that Nvidia's returns and its outlook for the rest of the year could influence the near-term course of not only the AI boom but broader market sentiment.
2. Fed's Barkin warns of 'reacceleration' as Jackson Hole looms
The Federal Reserve must be ready to address a reacceleration in the U.S. economy despite an unprecedented series of aggressive interest rate hikes aimed at corralling inflation and slowing growth, according to Richmond Fed President Thomas Barkin.
Speaking with Reuters on Tuesday, Barkin pointed to recent data showing hotter-than-expected retail sales and increasing consumer confidence as hints that the economy could remain strong even as prices stay elevated.
Such a scenario, Barkin flagged, may indicate a wider "playing field" of outcomes beyond a recession or a so-called "soft landing," which would see the Fed cool inflation without sparking an economic meltdown. It may also support the case for more monetary policy tightening, Barkin suggested.
The comments come ahead of a highly anticipated economic symposium in Jackson Hole, Wyoming this week. Fed Chair Jerome Powell is due to deliver remarks on Friday, with traders keen to receive any update on the central bank's outlook for inflation. Last week, minutes from the Fed's latest meeting showed that most policymakers believe more rate rises may be required to address lingering "upside risks" to inflation -- a statement that has helped fuel a recent surge in bond yields.
3. Urban Outfitters reports earnings beat; more retail results ahead
Urban Outfitters (NASDAQ:URBN) posted better-than-expected profit per share in its second quarter, sending shares higher in premarket trading, as the apparel group was boosted by record net sales and lower transportation costs.
Earnings per share of $1.10 in the three months until the end of July topped estimates of $0.89, due in part to a decrease in inbound transportation expenses. Net sales also surged to a record $1.27 billion, thanks to surging demand at the Philadelphia-based group's Free People brand that helped offset weakness at its eponymous Urban Outfitters label.
Meanwhile, La-Z-Boy (NYSE:LZB) also unveiled fiscal first quarter income that beat projections, but the recliner and sofa manufacturer warned of "soft" consumer trends, hinting at the challenges faced by many retailers as inflation-hit consumers pull back on spending on nonessential items. Shares fell premarket.
4. Futures point higher
U.S. stock futures edged into the green on Wednesday as traders geared up for the release of Nvidia's earnings and looked ahead to the Federal Reserve's symposium in Jackson Hole, Wyoming later in the week.
At 05:25 ET (09:25 GMT), the Dow futures contract added 124 points or 0.36%, S&P 500 futures rose by 22 points or 0.51%, and Nasdaq 100 futures jumped by 100 points or 0.67%. The main indices had a mixed session on Tuesday, with both the 30-stock Dow Jones Industrial Average and benchmark S&P 500 slipping by 0.3% and 0.5%, respectively and the tech-heavy Nasdaq Composite ticking up by 0.06%.
5. Crude slides amid U.S. crude stock data, Jackson Hole anticipation
Oil prices inched lower Wednesday despite another fall in U.S. crude stocks, although trading ranges remain tight ahead of the Jackson Hole symposium.
Crude inventories dropped by about 2.4 million barrels last week, according to data from industry body American Petroleum Institute Tuesday. This follows the massive draw of 6.2M barrels a week earlier, suggesting overall supply conditions are still tight.
The weekly report from the Energy Information Administration, the statistical arm of the U.S. energy department, is due later Wednesday.
Elsewhere, traders will be looking out for any potential clues about the future path of monetary policy as officials from the Federal Reserve, Bank of England, European Central Bank, and Bank of Japan all congregate for an annual meeting in Jackson Hole.