The latest earnings report from NVIDIA Corp (NASDAQ:NVDA) could be the much-needed spark to rekindle the U.S. stock market, according to traders at JPMorgan.
What Happened: The traders at JPMorgan, led by Head of U.S. Market Intelligence Andrew Tyler, suggested that Nvidia’s earnings could potentially trigger a renewed bullish sentiment towards U.S. stocks, reported Bloomberg on Thursday.
The report, released before the market opened on Thursday, predicted that Nvidia’s earnings could overshadow concerns about the Federal Reserve’s potential interest rate cuts and lead to a fresh wave of enthusiasm for U.S. stocks.
The prediction came true as Nvidia’s earnings, fueled by the growing impact of artificial intelligence technology, caused the S&P 500 Index to surge over 2%, marking its best day since November. The tech-heavy Nasdaq 100 Stock Index also rose over 3%.
"This may be a catalyst, not only for the Street to get materially more bullish on U.S. equities, but also to see a further decoupling of stocks and yields since the Magnificent 7 are proving to deliver on earnings expectations irrespective of the interest rate environment," Tyler wrote.
Despite the recent market slowdown due to unexpected consumer and producer price increases, Nvidia’s earnings have renewed hopes for a continuation of last year’s rally.
Why It Matters: This prediction from JPMorgan’s trading desk comes in the wake of Nvidia’s impressive earnings report, which led to a surge in the company’s market cap to nearly $2 trillion. The report also follows Nvidia’s CEO Jensen Huang’s bold predictions about the future of AI and the company’s role in it. These developments have sparked a renewed interest in Nvidia’s long-term potential.
Meanwhile, CNBC’s Jim Cramer has urged investors to look beyond skepticism and embrace winning stocks, using Nvidia as an example. He believes that many investors have overlooked the stock’s long-term prospects, focusing instead on macro events like the Federal Reserve’s interest rate hikes.
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