The latest earnings report from NVIDIA Corp NVDA could be the much-needed spark to reignite the US stock market, according to traders at JP Morgan.
What happened: JPMorgan traders, led by the head of US Market Intelligence Andrea Tylersuggested that Nvidia’s earnings could potentially trigger renewed bullish sentiment toward U.S. stocks, Bloomberg reported Thursday.
The report, released before the market opened on Thursday, predicted that Nvidia’s earnings could overshadow concerns about potential interest rate cuts by the Federal Reserve and lead to a new wave of enthusiasm for U.S. stocks.
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The prediction came true as Nvidia’s earnings, fueled by the growing impact of artificial intelligence technology, sent the S&P 500 index up more than 2%, marking its best day since November. The tech-heavy Nasdaq 100 stock index also rose more than 3%.
“This could be a catalyst, not only for the stock market to become substantially more bullish on US stocks, but also to see further decoupling between stocks and returns as the Magnificent 7 are proving to meet earnings expectations regardless of interest rate environment,” Tyler wrote.
Despite the recent market slowdown due to unexpected increases in consumer and producer prices, Nvidia’s earnings have renewed hopes for a continuation of last year’s rally.
Because matter: This forecast from JPMorgan’s trading desk comes on the heels of Nvidia’s impressive earnings report, which led to a surge in the company’s market capitalization to nearly $2 trillion. The report also follows Nvidia’s CEO Jensen Huang’s bold predictions about the future of artificial intelligence and the company’s role in it. These developments have sparked renewed interest in Nvidia’s long-term potential.
Meanwhile, CNBC Jim Cramer urged investors to look beyond skepticism and embrace winning stocks, using Nvidia as an example. He believes many investors have overlooked the stock’s long-term prospects, instead focusing on macro events such as interest rate hikes by the Federal Reserve.
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