Stock futures climbed higher on Tuesday, offering a glimmer of hope for investors after a challenging day on Wall Street. The S&P 500 fell by 0.5%, while the Nasdaq Composite witnessed a sharper decline of nearly 1.4%. However, the Dow Jones Industrial Average futures provided a more optimistic outlook, advancing by 81 points or 0.1%.
The 30-stock Dow stood out as the outlier, with a noteworthy advance of nearly 0.4%. Investors are now keenly awaiting Nvidia's pivotal fourth-quarter earnings report, expected to be released after the market closes on Wednesday. This report is anticipated to be a crucial market catalyst.
Nvidia's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the current quarter are predicted to range from $220 million to $230 million. However, analysts polled by FactSet had anticipated adjusted EBITDA of $237.1 million. Aswath Damodaran, a prominent market analyst, remarked on the situation.
"I think as the earnings report comes out tomorrow, my expectation is it's going to be a lot like September," – Aswath Damodaran.
"A replay of [the] September [quarter] where they will beat analyst expectations, but the market is going to be disappointed because the market seems to have set expectations higher than what analysts are seeing for the company," – Aswath Damodaran.
In other market developments, Workday's fourth-quarter adjusted earnings reached $1.92 per share on revenue of $2.21 billion, leading to a 7% surge in its shares. Meanwhile, Instacart faced a downturn as its shares dropped by 8%. The grocery delivery service reported fourth-quarter revenue of $883 million, which fell short of analysts' projections of $891 million, according to LSEG.
As the week progresses, economic data due on Wednesday will include new home sales and building permits. These reports come amid a backdrop of disappointing retail sales numbers and weak consumer sentiment readings, which have stirred concerns about the economy over the past week.
The main event for investors remains the release of the personal consumption expenditures (PCE) price index on Friday. The PCE is recognized as the Federal Reserve's preferred inflation gauge and will likely influence market movements.