Nvidia earnings results this week are more important to the stock market than the Federal Reserve or even jobs data, according to the options market. The artificial intelligence chipmaker is set to release results Wednesday after the stock market closes, moving back into the spotlight on Wall Street following a lengthy focus on the U.S. presidential election and the Federal Reserve’s interest rate outlook. But Jensen Huang’s company remains crucially important to the market, according to Wall Street firms tracking the options market. “While election implications, rates volatility and the Fed dominate conversations, options tell us NVDA earnings are still a very big deal for the market,” Gonzalo Asis, equity-linked analyst at Bank of America Securities, wrote Sunday. Asis says future implied moves for the S & P 500 have been tracking implied moves in Nvidia, suggesting there is more risk attached to the AI chipmaker than there is from nonfarm payrolls or consumer price index reports or even Federal Reserve policy meetings. “Options show that [Nvidia results] will be the most important catalyst left for the remainder of the year, notably, more so than NFP, CPI and FOMC,” Barclays’ equity derivatives strategist Stefano Pascale wrote Tuesday. NVDA 1D mountain Nvidia The options market shows an implied move of 8% for Nvidia, according to Barclays. That is lower than the two-year average of 9.3%, but greater than the 6.4% realized move following last quarter’s financial results. For investors, how Nvidia moves could determine what is next for a market that has been flagging lately following the postelection rally, according to Bank of America Securities’ Asis. The three major averages are more than 2% off their recent highs they reached immediately after the election. Asis recommends hedging against the earnings results in case Nvidia disappoints. Nvidia has driven roughly one-fifth of the S & P 500’s return over the past 12 months, and is expected to spur nearly 25% of the index’s third-quarter earnings growth, according to Bank of America. The semiconductor company has a market value of nearly $3.5 trillion, on a par with Apple but ahead of Microsoft , after soaring 196% so far in 2024.
