Why Nvidia’s Results Could Jolt the Market

SPEAKER_1 (0:00)

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Caitlin McCabe (0:18)

Investors' attention turns to Nvidia's earnings today, a report that could spark major market moves. Plus, a bill to release files related to Jeffrey Epstein heads to President Trump's desk for signature. And we take a look at the Sotheby's Auction that has the modern art world buzzing.

Kelly Crowe (0:38)

A Gustav Klimt painting just made auction history, selling for $236.4 million.

Caitlin McCabe (0:44)

It's Wednesday, November 19th. I'm Caitlin McCabe for The Wall Street Journal and here's the AM Edition of What's News. The top headlines and business stories moving your world today.

Global stock indexes are edging lower this morning, building on a continued selloff in the US. Yesterday's downturn marked the fourth straight loss for the S&P 500 and the Dow Jones industrial average, with the Dow falling 4.5 percent over that period, its steepest four-day pullback from a record close since 1999 Today, attention is turning to Nvidia, which reports earnings after markets close. Journal reporter Hannah Erin Lang says the financial results of the world's most valuable public company have more or less become a macroeconomic event in and of themselves.

Hannah Erin Lang (1:37)

Nvidia is one of the only companies where you see investors throwing watch parties or making tons of memes. There's just a huge amount of focus on this particular company and what its profits mean for the artificial intelligence trade as a whole.

Caitlin McCabe (1:52)

That's a sentiment echoed by the co-host of WSJ's take on the week podcast, Telestemos.

Telestemos (1:58)

We have Nvidia earnings, which are in event not just to talk about Nvidia's numbers, but to talk about what's going on with the AI economy. And interestingly, we did see the giant Japanese investor SoftBank sell a big chunk of its Nvidia stock recently, and actually to fund a bigger investment in OpenAI. So it's in that sense shifting some of its bet from the chips themselves to the applications like ChatGBT, which is what OpenAI makes. So that's an interesting trend that I think people are going to be wondering where is the money heading just within the AI trade? What stocks might benefit from here? Maybe it's less chip makers and more applications. So the AI trade might continue, but what form it takes might be really the big question.

Caitlin McCabe (2:43)

Chip makers, including Nvidia, have slipped dramatically in recent days, with Nvidia's shares down some 12 percent from their record high last month. With the bar set especially high for Nvidia's earnings, Hanna says it all sets the stage for some big swings in its stock.

Hannah Erin Lang (3:00)

Even a really impressive report on its face hasn't been enough to wow investors, and we've actually seen Nvidia shares turn lower the day after earnings, even if the financials themselves were quite good. That being said, for this particular round of earnings, option traders are actually anticipating some pretty big moves in Nvidia's stock price. So as of Tuesday, traders were positioning for roughly eight percent swing, higher or lower in the stock price after earnings and through Friday. And on Tuesday, some of the most actively traded Nvidia options contracts were those pegged to the stock jumping to $195 a share or $200 a share. And just for context, shares closed Tuesday at about $181.

Caitlin McCabe (3:48)

For more on the finances of the tech industry and whether the AI bubble could find its way into the bond market, check out this week's episode of WSJ's Take on the Week, wherever you get your podcasts.

After months of the president calling the push to release files related to Jeffrey Epstein, a Democratic hoax, legislation to make a trove of government files public has landed on Trump's desk. The House voted 427 to 1 yesterday to pass the Epstein Files Transparency Act, and the Senate quickly agreed to approve it by unanimous consent. The bill directs Attorney General Pam Bondi to make unclassified documents related to the late sex offender and his associate, Ghislaine Maxwell, publicly available within 30 days of being signed into law. Speaking in Washington after Congress approved the bill, Epstein accuser Annie Farmer said it was a watershed moment in the quest for accountability.

Annie Farmer (4:47)

I very much, I think, like many people, there were fights going on. There were definitely women that had worked so hard for so long for justice, but I had given up on the idea that anything would happen in this case.