Initial positioning of futures traders on Thursday suggests mixed sentiment toward the derivative contracts tied to the S&P 500 and the Nasdaq 100 indices. This is despite artificial intelligence (AI) chipmaker reporting another stellar quarter and issuing solid guidance for the current quarter.
Here’s how the index-linked futures are trading ahead of the market open:
- E-mini S&P 500 futures (ES): (-0.06%)
- Micro E-mini S&P 500 futures (MES): (-0.06%)
- Micro E-mini Nasdaq 100 futures (MNQ): (-0.07%)
- Nasdaq 100 futures (NQ): (-0.08%)
Market on Backfoot Despite Nvidia Earnings: Nvidia shares rose a little less than a percent point in Thursday’s premarket trading but this optimism hasn’t seeped down to the broader market.
Didn’t the Jensen Huang-led company report enough to trigger an across-the-board buying in the market? Here’s a look at the print for the fourth quarter of the fiscal year 2026:
- Adjusted earnings per share (EPS): $1.62 vs $0.89 (consensus $1.54)
- Revenue: $68.13B vs $39.33B (consensus $66.23B)
- Data center revenue at a record $62.3B (75% YoY growth; 22% Q-o-Q growth), thanks to strong uptake for accelerated computing and AI
- Q1’27 revenue guidance: $78B, plus or minus 2% (does not include AI chip revenue from China); consensus $76.23B
- Q1’27 adjusted gross margin: 75%, plus or minus 50 basis points
CFO Colette Kress clarified that said, beginning in the first quarter, the company would include stock-based compensation in its non-GAAP financial measures.
Market Reaction Mixed: Tech bull and Wedbush analyst Daniel Ives went gung-ho over Nvidia’s quarter results. Calling the results as a present in a red bow for investors, Ives noted that the company’s guidance does not factor in any H200 revenue from China. When China revenue begins flowing in, it would unlock significant upside and growth for Nvidia, he said.
On the other hand, “Big Short” fame Michael Burry, whose prescient prediction of the housing market collapse earned him credibility, once again raised alarm regarding the inner details of the report. In a substack post, Burry pointed to the spike in purchase obligations for the fiscal year 2026 to $95.2 billion from $16.1 billion a year ago, and the company’s commentary that it will likely continue to grow. Attributing the spike to the demand for longer-term contracts from supplier TSMC, Burry said, “NVDA has been forced to place non-cancellable purchase orders well before demand is known.”
What’s Next For Futures Traders: The routinely scheduled weekly jobless claims data, a speech by Vice Chair for Supervision of the Federal Reserve Board Michelle Bowman, Seven-year Treasury note auction and Friday’s January producer price inflation reports will likely lend some direction to the market, before it turns its attention to the February non-farm payrolls report due next week.
Any tariff-related headline also could move the needle for the market.
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