S&P 500 Forecast: SPX inches towards its record high after Nvidia beat forecasts

US futures                                            

Dow futures 0.06%, S&P futures 0.12%  & Nasdaq futures 0.20%

In Europe                                                                           

FTSE 0.27% & DAX 0.45%

• Nvidia beats forecasts but sees only modest gains
• Software stocks show cautious recovery
• Tariff uncertainty remains
• Oil falls as inventories jump

Stocks edge higher as Software selloff halts & Nvidia beats

US stocks are set to open higher as AI fares fade and Nvidia beats expectations.

Concerns over the software sector are easing on Wednesday as AI disruption fears fade. The software sector has been under the spotlight, falling by some 20% so far this year amid fears that AI will replace the enterprise software industry. However, those fears eased following the Anthropics agency event earlier in the week, and after Nvidia CEO Jensen Huang said that he believed markets have it wrong, pushing back on fears that AI agents will cannibalise the software industry.

While Nvidia beat expectations, there were definitely no market fireworks. The broad takeaway is that Nvidia is already well-priced for the AI boom, even if AI infrastructure spending ramps up.

On the data front, initial jobless claims rose to 212k in the holiday week. This was a less-than-expected increase, indicating that layoffs remain relatively low. Continuing claims, a proxy for the number of people receiving benefits, declined to 1.83 million in the previous week.

Attention is also on the US-Iran nuclear talks in Geneva, which could impact commodity prices, particularly oil and gold.

Corporate News

NVIDIA is rising modestly 1.4% ahead of the open, paring earlier 4% gains as the market digests stronger-than-forecast earnings and revenue. Q4 EPS was $1.62 on revenue of $68.1 billion, above estimates of $66.2 million. Revenue had climbed 73% from the same period a year ago. The firm also issued better-than-expected guidance for Q1. The data centre business is now responsible for more than 91% of its total sales. Despite impressive numbers, Nvidia failed to spark a full-on rally, underscoring the high expectations surrounding AI.

Salesforce is falling 3% after the cloud-based software company unveiled fiscal 2027 revenue forecasts that fell short, a sign that demand for software may be taking a hit as more companies cut budgets.

Warner Bros. Discovery is unchanged despite reporting a 6% drop in quarterly revenue, hurt by declines in the traditional TV and film business.

Krispy Kreme is jumping 15% after the doughnut maker reported better-than-expected Q4 results and progress in its turnaround.

S&P 500 forecast – technical analysis.

The S&P 500 trades in a holding pattern caught between 6800 and 7000. The price recovered from the 6800 low and is attempting to rise above the 50 SMA at 6900. Above here, 7000 comes into focus again. Selles would need to break below 6800, and 6730 could spur a deeper selloff.

FX markets – USD flat, GBP/USD falls

The U.S. Dollar is unchanged on Thursday amid ongoing tariff uncertainty. Trump's labelled half of 10% went into place on Tuesday, although this could still be raised to 15% or higher.

EUR/USD is unchanged amid a quiet economic calendar. ECB president Lagarde reiterated to expects inflation to arrive at the 2% target over the medium term.

GBP USD is under pressure as investors turn their attention to the Gorton and Denton by-election, which could have implications for PM Kier Starmer. The election provides insight into how Labour is performing in an area it won by a wide margin around 20 months ago. The polls are pointing to a disappointing outcome for the ruling party.

Oil falls as inventories jump

Oil prices are falling by over 1% on Thursday following the largest jump in US crude inventories in three years and as investors assess the implications of US-Iran talks.

Data showed that US crude inventories rose by 16 million barrels last week, according to EIA data. This, combined with weakness in North Sea physical oil markets, is also weighing on prices.

At the same time, a US envoy, including Jared Kushner, is due to meet the Iranian delegation in Geneva. These are the third round of talks aimed at reaching a nuclear agreement.

On the supply side, Saudi Arabia is lifting oil production and exports as part of a contingency plan in the case of US strikes on Iran, disrupting supplies in the Middle East.