NVDA Earnings Report: A Good Potential Shifter Amid Trump's Rocky Stock Market Start
U.S. stocks have lagged behind their European counterparts this year due to fading megacap tech gains, tariff uncertainty, and renewed inflation risks. However, Nvidia's upcoming earnings report offers a glimmer of hope for American markets, which have struggled during President Donald Trump's second term.
Europe's Stoxx 600 benchmark, which recently hit a record high, has risen more than 8.8% this year and is up over 9.1% since Trump's re-election in November. These gains have outpaced the S&P 500, which is up just 2% for the year, and the Nasdaq, which remains largely unchanged.
Bank of America noted that recent weekly inflows into European stocks were the strongest in at least three years. Interestingly, these gains come despite an unimpressive fourth-quarter earnings season and tepid economic growth in Europe. In contrast, estimates suggest S&P 500 earnings rose 15.7% in Q4, totaling $540 billion, with a GDP growth rate of around 2.3%.
Nvidia's earnings report, scheduled for release tomorrow, is seen as a key market catalyst that could help U.S. stocks close the gap with their European peers. Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, notes that European gains may reflect hopes for an end to Russia's war on Ukraine and economic recovery in China. However, she warns that reciprocal tariffs on European exports and shifting U.S. foreign policy could hinder the region's recovery.
BlackRock's Jean Boivin remains optimistic about the U.S. market, expecting it to reclaim leadership this year, driven by corporate earnings strength and the artificial intelligence theme, particularly from companies like Nvidia. With market jitters surrounding macroeconomic factors, Trump's policies, and inflation concerns, Nvidia's earnings report could be a much-needed positive sign for the U.S. stock market.
