Wall Street has experienced a decline this week, though US futures are showing some recovery, particularly in tech shares. Nvidia’s upcoming earnings are drawing attention, especially in light of the recent DeepSeek emergence.
The S&P 500 is testing its 100-day moving average, a level it has approached only four times since 2024. The late July to early August selloff was a notable exception in an otherwise bullish year.
The Nasdaq has also tested its 100-day moving average three times since 2024, with the previous market rout similarly challenging investor confidence. This current drop may indicate a shift in market sentiment.
Market expectations for Nvidia’s earnings continue, with particular focus on capital expenditures and AI investments. Investors are looking to understand how Nvidia plans to navigate the implications of DeepSeek.
The narrative Nvidia presents will be vital for maintaining market confidence. A lack of reassurance could negatively affect risk trades as critical technical levels loom.
Despite the uptick in US futures, caution remains warranted as potential pitfalls exist should Nvidia’s performance disappoint. Historical trends suggest that market dynamics can change unexpectedly.
We have seen Wall Street struggle this week, though a modest rebound in US futures suggests that not all confidence has been lost. Technology stocks are leading the way in this partial recovery, with Nvidia’s earnings report looming large. DeepSeek’s emergence has only added to the anticipation, raising new questions about market positioning.
The S&P 500 is now hovering around its 100-day moving average, a level that has acted as a foundation for momentum throughout the year. This mark has only been breached four times since 2024, the most notable instance occurring between late July and early August. That particular downturn caught many off guard, standing out in what has otherwise been a strong year for stocks.
The Nasdaq has displayed a similar pattern. This is the third time in 2024 it has tested its 100-day moving average, with past declines shaking investor sentiment. Each time the market has approached this threshold, traders have been forced to reconsider their risk exposure. A decisive break below these levels could open the door to further unwinding, whereas a bounce would reinforce confidence in the broader trend.
With Nvidia’s report approaching, expectations are focused not just on sales figures but also on spending plans. Investors want clarity on how capital expenditure will be deployed, particularly regarding artificial intelligence. Given the attention surrounding DeepSeek, the response from Jensen and his team will help shape sentiment for weeks to come. Their ability to reassure the market will carry weight far beyond just the stock itself.
Should Nvidia’s message fail to provide stability, risk assets elsewhere will feel the impact. The stock serves as a bellwether for wider AI enthusiasm, making its reaction one to watch closely. With key technical levels already being tested, an unfavourable response could accelerate selling. On the other hand, a strong report could reaffirm investor confidence, reinforcing areas that have recently come under pressure.
Even though futures are attempting a rebound, the current setup requires traders to tread carefully. Past patterns show that optimism can fade quickly when expectations are set this high.
