Nvidia in Focus: Markets Waiting for AI Giant's Report

Wall Street's attention will be on the quarterly earnings report from chip giant and key player in the AI race this week. The company's results could set the tone for the entire tech industry, especially as tensions in the U.S. debt market grow tense.

Debt Pressure: Stock Market Loses Ground

After a meteoric rise in recent weeks, U.S. stock indexes have taken a step back amid growing concerns about the country's fiscal future. New tax and budget proposals have added fuel to the fire as investors worry that the already massive US government debt of more than $36 trillion could grow even further. That has pushed long-term Treasury yields higher, with 30-year bonds breaking through 5% to hit their highest since late 2023.

A New Round of Trade Tensions

The situation was exacerbated by Donald Trump's harsh statements towards the end of the week. He made threats against the European Union and Apple, fueling speculation about a potential trade confrontation. The comments have sparked a new wave of anxiety in markets already nervous about any hint of instability.

All Eyes on Nvidia

The week will culminate with Nvidia's quarterly results on Wednesday. The company, which has one of the largest market capitalizations in the world, plays a key role in shaping stock index movements. Investors expect Nvidia to deliver not just good numbers, but also strong signals of further growth in the AI and high-performance computing segment.

After a meteoric rise, cooling at the start of 2025

After a spectacular leap, when Nvidia shares added more than 1000% from the end of 2022 to the end of 2024, 2025 has started on a calmer note for the company. Since the beginning of the year, the shares have lost about 2%, which, however, is perceived more as a respite after a crazy rally than as an alarming signal. Nvidia's rapid growth was mainly due to explosive demand for AI chips, which formed the basis of a new wave of technological revolution and brought the company record profits.

Forecasts are optimistic: we expect strong numbers

Financial analysts surveyed by LSEG expect Nvidia's quarterly report to confirm its leadership position. They estimate that net profit for the first three months of the year could grow by almost 45%, with revenue likely to reach a hefty $43.2 billion. Such figures cement Nvidia's status as one of the main beneficiaries of the AI frenzy sweeping global markets.

The China Factor: Sanctions and Billions in Losses

But not everything is so rosy. Geopolitical clouds are on the horizon. Nvidia has already warned investors that restrictions from the US government on the export of advanced chips, including the flagship H20, to China could cost it $5.5 billion. The move was part of a broader strategy by Washington to control tech exports as part of its standoff with Beijing. And now the focus is not only on Nvidia's earnings, but also on the risks associated with international politics.

Temporary relief, but risks remain

Since then, there has been a partial retreat from the tough rhetoric. Signs of a possible truce between the US and China have eased the situation somewhat, allowing the stock market to recover some of its lost ground. However, the S&P 500 index by May 2025 is still down 1.3% year-to-date and 5.6% from its February high.

A new wave of pressure from Trump

Friday's trading session ended with a new decline after another loud statement by Trump. He announced his intention to introduce 50% tariffs on imports from the EU from June 1, and also promised a 25% tariff on Apple products if they are not assembled in the US. These steps have caused a new wave of tension and have become an additional challenge for large tech corporations, including Nvidia, whose supply chains depend on global stability.

Credit worries: Moody's hits US confidence

The economic agenda last week was dominated by one name: Donald Trump. His aggressive budget initiatives and fiscal promises became the central theme for investors. Further worrying the market was Moody's, which downgraded the US credit rating, citing concerns about rapidly growing public debt. This move undermined confidence in the financial stability of the world's largest economy.

Investors are betting on Europe

Interestingly, despite the tensions, European stocks continue to attract capital. According to Morningstar, 34 billion euros have flown into European stock funds since the beginning of the year through May 16, which is four times more than the volume of investments in US equity instruments over the same period (8.2 billion euros). This indicates growing confidence among investors in European prospects amid uncertainty in the US.

View from Europe: Eurozone inflation barometer

This week, fresh data will also start to arrive from Europe. On Tuesday and Friday, two key engines of the eurozone economy, Germany and France, will present their inflation figures. These publications will be an important benchmark for both the European Central Bank and global investors monitoring how much inflation processes in the Old World diverge from the American dynamics. Next week, a consolidated report on consumer prices for the entire eurozone is expected.

Behind the scenes intrigue: the market waits with bated breath

As the world prepares for new economic reports, investors are in no hurry to make decisive bets. Tariff tensions, election prospects, inflation expectations - all this forms an extremely complex context in which any statistical publication can become a trigger for a major market movement.