Yahoo Finance

Sticking with Nvidia here. Nvidia shares soaring nearly 20% in the past three days. Following its, that was actually rather, after its last earnings report back in May, but the widespread stock market rally many expected never materialized. Will it be the same thing this time around? Yahoo Finance markets reporter Josh Schafer has the story for us. And Josh, I got tripped up because I was thinking about the 30% rally we've seen in the last few days.

It's doing it again.

It's doing it again.

And Nvidia is doing the number go up thing again. It does that. It does that a lot though, Mandy. Um, but it was interesting last quarter. You guys were really just talking about this with David, right? We had seen Nvidia rally pretty heavily. We talked about it all week leading into the report. Nvidia earnings, Nvidia earnings, it's gonna be the catalyst, it's gonna be the catalyst. Stock went up 20% in three days and the S&P did nothing. The S&P was flat. And so I guess what I'm thinking about this week headed into this Wednesday report is maybe that just happens again. And maybe that's fine. Maybe one stock, what they say about their very specific business that doesn't relate to most of the other stocks in the S&P 500. It does relate, of course, with the theme. And some of the biggest companies are buying their chips, but it is just one company. And so maybe it made more sense last time that Nvidia ripped and the market didn't rip and you're not seeing a bunch of people buy a bunch of other AI companies and you sort of have this crazy rally that doesn't make a ton of sense. I so maybe that is a chance of something we see coming out of Wednesday because to me, right now, the market action over the last three weeks, it's been a macro-driven market. We're talking a lot about the Fed. We're talking a lot about labor market data. Those have been the things that investors care about. So I do think of course, Nvidia earnings matter, and they matter for big tech and they matter for AI. But with a jobs report next Friday that feels very, very big for how much the Fed is gonna cut, where we stand on if we feel like we're headed into recession, it seems like there's just other stories going on right now that are driving the market action a little bit more to me.

And I would also think that if we don't see that sort of outsized reaction and we don't see the S&P follow through and more of a broader market reaction, I think last quarter it definitely caught investors and the market off guard. But if that were to happen this time around, I also don't think it would be maybe as concerning as some had initially thought it was following last quarter's print, just because of the fact going your macro point and what you were just talking about, the fact that we are starting to see this broadening out, the fact that we are about to start potentially getting a the first rate cut here from the Fed. That that does talk about the fact that we are likely going to be see strength in other areas of the market.

Well, and you're looking at a market that's basically at record highs, right? And so for Nvidia's earnings to inspire you to go bid up the utility sector, which is the second best performing sector of the year already on AI hopes, right? That's an AI related trade, you could argue. But does that really make you want to bid up utilities, which is near an all-time high? Maybe not, right? Like maybe the risk here is more to the downside, which would be if Nvidia's revenue guidance isn't what the street expects and they're not seeing demand or they're not able to get these chips out to people, I think that's probably the more interesting kind of broad market reaction we could see from this would be if it's finally not just a blowout quarter. And they are finally starting to flag something that isn't just up into right, up into the right for the stock price. What does that actually mean for the hyperscalers that are buying all of these chips? It probably would have more waiting to me than another big Nvidia Nvidia beat. I don't think that that's gonna matter that much to the market this time around. Well, good luck. I'll come on on Thursday and debate it with you guys, exactly.

Exactly, exactly. We have a call now to talk about it on Thursday.

Well, and we'll have the macro data too, so it'll be a fun soup of issues come Thursday morning. Josh, thank you so much as always, appreciate it.