A revision to Nvidia Corp. could be enough to reignite Wall Street's interest in U.S. stocks.
According to a report by JPMorgan Chase & Co.'s trading desk, with Andrew Tyler, head of intelligence , the upcoming valuations could lead to a new rally in U.S. stocks and may ease recent concerns about when the Federal Reserve will start cutting interest rates.
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That's exactly what happened, with a new burst of excitement about the implications of artificial intelligence sending the S&P 500 up more than 2%. The tech-heavy Nasdaq 100 index rose more than 3%.
“This development could be a catalyst, not only for the rise in the value of Street stocks in the United States, but also for further decoupling stocks and returns. The Magnificent 7 appears to be meeting earnings expectations regardless of the interest rate environment,” according to Andrew Tyler.
Stock market investors were eagerly awaiting Nvidia's results, hoping it would reignite the sentiment that fueled last year's rally.
Although the S&P 500 hit new all-time highs, the rally had slowed. Higher-than-expected consumer and producer price readings forced traders to question their expectations for interest rate cuts.
“It’s like a microcosm of the market,” said Keith Buchanan, senior portfolio manager at GLOBALT Investments. “We wonder if earnings can match the current situation, with the market exploding as if it’s emerging from a variety of factors.”.
Andrew Tyler reaffirmed the trading division's "bullish stance" on stocks, citing strong economic growth, positive earnings and the Fed's willingness to ease policy.
He and his trading desk colleagues indicated that an early withdrawal was possible before the end of February.
Read more: TSMC: Shares rise after Nvidia's target price hike
However, it was reported that the macroeconomic and fundamental backdrop is set to deteriorate, leading to a recession. Positive developments are being seen in the technology, as well as in sectors such as large banks, credit card issuers, home builders, transportation companies and retailers.
Source: bnnbloomberg
