U.S. stock futures rose slightly on Tuesday night as markets attempted to stabilize. They followed a volatile session pressured by sliding Nvidia shares and hotter-than-expected inflation data.
Nvidia Market Cap Declines After CEO Controversy
Nvidia’s market capitalization dropped to approximately $4.07 trillion after a two-day decline. This marks its lowest level since late March.
The slide intensified as the company’s board announced an investigation into co-founder and CEO Jensen Huang. The probe concerns his relationship with an alleged Chinese spy.
In an email to the company’s employees, Jensen Huang said he was unfaithful to his wife, stated that his actions hurt his wife and children, and expressed that there is no excuse for what he did and that he is deeply sorry.
Dan Ives, a partner at Yorkville Ives, characterized the situation as a black eye moment
for the chipmaker. The controversy has contributed to a weak price trend for Nvidia shares across long, medium, and short-term rankings, according to data from Benzinga’s Edge.
Inflation Data Increases Rate Hike Odds
The consumer price index increased 0.4% month over month in October, exceeding expectations. Equities faced downward pressure on Tuesday following the report.
Market expectations for a quarter-point interest rate hike in December rose to approximately 90%, according to the CME Group’s FedWatch tool.
“Despite some technical uncertainty, higher than desired levels of inflation should keep the Fed in a stance of dissatisfaction with the degree of progress on inflation remaining lackluster, so hiking the Fed Funds policy rate in December is our and the market’s base case,” wrote Rick Rieder, CIO of global fixed income at BlackRock. “The question now is more of one of the extent of the hike.”
Rick Rieder, CIO of global fixed income at BlackRock
Federal Reserve Governor Christopher Waller has influenced traders to price in higher probabilities of a rate increase. Markets were pricing a 90% likelihood of a rate hike during the December meeting following the data release.
Dow Jones, S&P 500, and Nasdaq Indices Fell
The Dow Jones Industrial Average fell more than 150 points in regular trading on Tuesday. The S&P 500 shed 0.4%, while the Nasdaq Composite lost 0.7%.
| Company | Expected Earnings Per Share | Expected Revenue |
|---|---|---|
| Occidental Petroleum | $1.46 | $6.79 billion |
| $3.85 | $9.37 billion | |
| -$2.32 | $382.57 million | |
| -$0.44 | $45.69 million |
Investors Await Interest Rate Clarity and Nvidia Investigation Results
Investors await clarity on the extent of the December interest rate hike and the final outcome of the investigation into the Nvidia CEO.
Earlier coverage: S&P 500 Futures Rise as Traders Await Consumer Inflation Report
