U.S. Stocks Trade Mixed: Nvidia Earnings, PMI Data, and Fed in the Spotlight

U.S. stock futures traded mixed on Monday as investors anticipated key earnings from chipmaker Nvidia (NVDA) and comments from several Federal Reserve officials.

In early trading, the Dow Jones futures contract lost about 110 points, or 0.3%, as S&P 500 futures traded 5 points, or 0.1%, higher and Nasdaq 100 futures gained about 85 points, or 0.4%.

All three major indexes declined in the previous week, pulling back from recent highs following Donald Trump’s election victory. This retreat came after Federal Reserve Chairman Jerome Powell indicated that the central bank was in «no rush» to cut interest rates further.

Has the S&P’s Pullback Begun?

According to strategists at RBC Capital Markets, the pullback in the S&P 500 index may already be underway, with the potential for a decline of approximately 5% to 10%.

The investment bank cited several factors contributing to this outlook, including rising valuations, positioning in futures markets, and a history of bullish sentiment. These elements have historically preceded similar market declines since late 2022.

Nvidia’s Results in the Spotlight

Nvidia’s earnings are set to take center stage this week as the chipmaker, a leading player in this year’s artificial intelligence surge, prepares to report its third-quarter results after the close on Wednesday.

These results could serve as a barometer for investor sentiment toward technology stocks, the artificial intelligence sector, and broader market confidence, especially as the post-election rally shows signs of losing momentum.

Nvidia’s chips, regarded as the gold standard in the AI industry, have driven the company’s shares to rise nearly 200% this year, surpassing Apple (AAPL) to become the world’s largest company by market capitalization.

Other notable earnings reports this week include Walmart (WMT) and Lowe’s (LOW), which are expected to shed light on the strength of consumer spending.

Thus far, 93% of S&P 500 companies have reported their earnings, with 75% surpassing estimates for earnings per share and 61% exceeding revenue expectations, according to FactSet data.

Tesla Soars on Autonomous Driving Hopes

Tesla (TSLA) shares surged about 8% in premarket trading Monday following Bloomberg reports that the incoming Trump administration plans to establish a federal framework for fully autonomous vehicles, making it a top priority for the Department of Transportation.

Spirit Airlines Files for Bankruptcy

Spirit Airlines (SAVE) shares rose 2.8% after the low-cost carrier filed for bankruptcy protection. The airline cited years of mounting losses and announced a pre-arranged agreement with bondholders to navigate the bankruptcy process. Spirit expects to emerge from bankruptcy during the first quarter of 2025.

PMI Data in Focus

The U.S. economic calendar is relatively light this week, with the spotlight on Friday’s manufacturing and services PMI data.

This data is expected to provide early insights into how companies are reacting to the potential impact of Trump’s proposed trade tariffs, which will be closely monitored by markets in the coming weeks.

Investors will also hear from several Federal Reserve officials, including Chicago Fed President Austan Goolsbee, Kansas Fed President Jeffrey Schmid, and Cleveland Fed President Beth Hammack.

Crude Oil Prices Rise Amid Ukraine-Russia Fears

Crude oil prices edged higher on Monday as clashes between Russia and Ukraine intensified over the weekend. However, gains are expected to be capped by ongoing concerns about a supply glut in the coming year.

Reports on Sunday indicated that President Joe Biden’s administration authorized Ukraine to use U.S.-made weapons for deeper strikes into Russian territory. This move came in response to Russia’s deployment of North Korean ground troops to support its forces.

While the conflict has had minimal impact on Russian oil exports so far, a potential Ukrainian attack on Russian oil infrastructure could significantly influence crude markets, heightening geopolitical tensions.