Nvidia Sparks Pre-Market Rally Amid Tariff Jitters and Bank Earnings

Investors Anticipate Key Inflation Data, Weighing Chip Giant’s China Sales Resumption

Stock futures pointed higher Tuesday, buoyed by a significant jump in Nvidia shares. Investors are simultaneously assessing major bank earnings reports and awaiting a crucial inflation reading that could signal the impact of recent trade policies.

Nvidia Secures Green Light for China Chip Sales

Nvidia saw its shares climb over 4% in pre-market trading after announcing it will soon recommence sales of its H20 AI chips to China. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon, the company stated Tuesday.

Market Eyes Inflation Data and Earnings Season

Futures tied to the S&P 500 advanced 0.4%, while Nasdaq 100 futures gained 0.6%. The Dow Jones Industrial Average futures experienced a slight dip, shedding 17 points.

The market anticipates a second-quarter earnings season that could provide a lift to stocks already trading at historic highs. Analysts project a modest 4.3% year-over-year earnings growth for the S&P 500, according to FactSet data, indicating tempered expectations.

Attention is sharply focused on the June consumer price index (CPI) report, scheduled for release Tuesday morning. This key economic indicator is expected to provide insights into how the Trump administration’s tariffs have influenced price levels. Dow Jones consensus estimates predict a 0.3% monthly increase and a 2.7% headline inflation rate. Any unexpected rise could unsettle a market that has yet to fully price in the effects of these trade measures.

Mixed Results from Major Banks

Big banks reported their second-quarter financials today. Wells Fargo exceeded earnings expectations, but a reduction in net interest income guidance led to a 2% decline in its share price. JPMorgan Chase’s stock dipped approximately 0.3%, despite reporting better-than-expected second-quarter results, driven by robust trading and investment banking revenues.

Tariff Threats Continue to Influence Sentiment

Wall Street concluded Monday’s session with gains, shrugging off President Donald Trump’s threat of imposing a 30% tariff on the European Union and Mexico starting August 1.

“You’re at the point where the president is talking again about higher tariff rates. That’s going to take the effective tariff rate up even higher than we currently anticipated to be. So, my argument would be, while we determine exactly what that level is going to be, after a truly historic rally off the lows, some breather is in order.”

—Dan Greenhaus, Chief Strategist at Solus Alternative Asset Management

The CBOE Volatility Index (VIX), a key measure of market fear, currently sits around 14, indicating relatively subdued investor anxiety despite ongoing trade tensions. This contrasts with the volatility seen during peak trade dispute periods in 2019 (MarketWatch).