US Stock Futures Rise on Nvidia's Strong Earnings, Dollar Strengthens

US stock futures gain after Nvidia's strong earnings, with the company's shares up 4% in post-market trading. Treasuries fall and the dollar strengthens. Contracts for the S&P 500 and Nasdaq 100 rise, while Japanese and Australian equity futures advance. The US 10-year yield increases three basis points, despite solid investor demand for shorter-term securities. Market sentiment is mixed, with some investors concerned about the potential impact of trade tensions on AI chip demand.

US stock futures gained momentum on Monday, May 29, 2025, following Nvidia's strong earnings report. The company's shares surged by 4% in post-market trading, driven by positive analyst sentiment and robust earnings growth. The S&P 500 and Nasdaq 100 contracts rose, while Japanese and Australian equity futures also advanced. The US 10-year yield increased by three basis points, reflecting a strengthening dollar and solid demand for shorter-term securities.

Nvidia Corp. (NASDAQ: NVDA) reported record adjusted gross profits of $28.9 billion in its fourth-quarter earnings call in February 2025, marking a 70% year-over-year increase. The chipmaker's AI chip demand has been a significant driver of its growth, with a 93% increase in data center revenue in the fourth quarter. Despite facing challenges from U.S.-China trade restrictions and competition from Huawei's Ascend chips, Nvidia's profitability remains robust, with analysts expecting first-quarter 2026 revenue of $43 billion, up 65% year over year.

Market sentiment was mixed, with some investors expressing concern about the potential impact of trade tensions on AI chip demand. Analysts have warned of margin pressure due to new U.S. tariffs and China's retaliatory measures, which could affect supply chain costs. However, Nvidia's pivot to U.S. AI infrastructure investments and new chip designs for China signal resilience. The company's $37.6 billion cash reserve and investments in U.S. AI infrastructure bolster its supply chains and are backed by Taiwan Semiconductor Manufacturing's $165 billion Arizona fab expansion.

The AI market is projected to grow at a 37% CAGR through 2030, according to Grand View Research, supporting Nvidia's $170 billion fiscal 2026 revenue forecast. Analysts remain bullish on the stock, with 55 out of 61 recommending buying shares and a consensus one-year price target of $163.01, implying more than 20% upside potential from its current price. However, concerns about supply chain constraints and global economic uncertainty have led some analysts to lower their price targets.

In summary, Nvidia's strong earnings report and positive analyst sentiment drove US stock futures higher on Monday, May 29, 2025. Despite trade tensions and competition, the chipmaker's robust growth prospects and cash reserve position it for further gains. Market sentiment remains mixed, with investors cautious about the potential impact of trade tensions on AI chip demand.

References:
[1] https://247wallst.com/investing/2025/05/28/nvidia-nasdaq-nvda-stock-price-prediction-for-2025-where-will-it-be-in-1-year/
[2] https://www.fxempire.com/forecasts/article/nasdaq-100-index-sp-500-and-dow-jones-forecasts-us-indices-slightly-positive-in-early-premarket-trading-1522308
[3] https://mishtalk.com/economics/sp-500-and-nasdaq-100-outlook-is-the-big-rally-over/