U.S. stock futures edged lower on Wednesday ahead of a highly anticipated earnings report from Nvidia, the semiconductor powerhouse that has been a key player benefiting from the surge in AI-related demand. Meanwhile, Stellantis announced a new CEO appointment, and a weak Japanese government bond auction sparked concerns about demand for long-term debt.
Nvidia’s Earnings Take Center Stage
Investors are focused on Nvidia’s (NASDAQ:NVDA) quarterly results, set to be released after markets close Wednesday. The chipmaker is expected to report a substantial 66% increase in revenue, hitting just over $43 billion for the quarter ending April 30, reflecting strong growth compared to the previous year.
Nvidia has largely benefited from continued investments by major AI companies expanding their data centers and cloud infrastructure. However, market attention will be particularly on Nvidia’s outlook, amid tighter U.S. export controls restricting chip sales to China – a critical market that faces increasing regulatory hurdles. Additionally, shifts in AI workloads toward less data-intensive inference processes and growing interest in lighter AI models could moderate future chip demand.
Historically, Nvidia’s shares have tended to decline slightly following earnings releases due to high investor expectations, and this quarter may see similar volatility, with options activity around semiconductor ETFs indicating cautious positioning.
Futures Slip as Investors Brace
U.S. stock futures fell modestly Wednesday, retracing some of Tuesday’s strong gains. At 03:40 ET, S&P 500 futures were down 0.2%, Nasdaq 100 futures dipped 0.1%, and Dow futures dropped 0.2%.
Tuesday’s market rally was buoyed by President Donald Trump’s announcement of a delay in implementing a 50% tariff on European Union imports until July 9. The Dow surged over 700 points (1.8%), the S&P 500 gained 2%, and the tech-heavy Nasdaq advanced roughly 2.5%.
In addition to Nvidia, investors are awaiting earnings reports from retailers including Macy’s (NYSE:M), Abercrombie & Fitch (NYSE:ANF), and Dick’s Sporting Goods (NYSE:DKS). Market watchers will also focus on the minutes from the Federal Reserve’s May meeting, expected later Wednesday, for insights on monetary policy amid economic uncertainty.
Japanese Bond Auction Signals Demand Worries
Concerns about global bond demand rose after Japan’s 40-year government bond auction drew the lowest bids since November. The auction’s bid-to-cover ratio fell to 2.2 from 2.9 in March, signaling weaker appetite for long-dated debt.
This comes amid a broader selloff in long-term bonds worldwide, fueled by worries over fiscal deficits in major economies such as the U.S. and Japan. Last week, the U.S. Treasury’s $16 billion auction of 20-year bonds also experienced soft demand, as investors remain cautious about America’s rising debt amid ongoing congressional debates over tax and spending legislation.
Adding to concerns, Moody’s downgraded the U.S. sovereign credit rating from its top-tier “Aaa” status, joining Fitch and Standard & Poor’s in previous downgrades.
Wednesday’s scheduled auctions include shorter-duration U.S. two-year floating rate notes, five-year notes, and German 15-year federal bonds.
Stellantis Names New Chief Executive
Automaker Stellantis (NYSE:STLA) announced Antonio Filosa as its new CEO, succeeding Carlos Tavares who left in December following a steep decline in profits and sales that raised doubts about his leadership.
Filosa, who has held multiple senior roles at Stellantis – including Chief Operating Officer for the Americas – will assume full CEO responsibilities immediately and is set to be formally elected at an upcoming Extraordinary Shareholder Meeting.
The company praised Filosa’s extensive industry experience of over 25 years, deep knowledge of Stellantis, and strong leadership capabilities as key reasons for his selection.
Oil Prices Rise on Supply Concerns
Oil prices inched higher Wednesday amid worries about possible new sanctions on Russia, which could disrupt global supply. At 03:40 ET, Brent crude futures rose 0.6% to $63.96 per barrel, while U.S. West Texas Intermediate crude futures gained 0.7% to $61.29 per barrel.
OPEC and its allies (OPEC+) are expected to meet this weekend to discuss another potential production increase. The group has already been gradually easing output cuts with supply additions in May and June.
Investors digested recent remarks from President Trump warning Russian President Vladimir Putin that he is “playing with fire,” alongside indications that new sanctions against Russia remain under consideration – adding to concerns about energy supply risks.
Market participants are also awaiting the American Petroleum Institute’s weekly inventory report, which has been delayed this week due to the U.S. Memorial Day holiday.