FX.co ★ US stock market: Nvidia serves as key to further rally

US index futures are trading calmly on Wednesday morning: the S&P 500 is hovering around 6,470 in premarket trading, while the Nasdaq 100 is holding near 23,530. Yesterday's session brought moderate gains to the markets: the Dow rose by 0.3%, the S&P 500 added 0.41%, and the Nasdaq climbed 0.44%.

Investors have shifted focus to Nvidia's earnings report and Friday's PCE release — the Personal Consumption Expenditures Price Index, which is considered the Federal Reserve's key inflation gauge.

After Friday's strong rally, a pause seems logical. Markets were energized by Powell's dovish signal in Jackson Hole that the central bank is open to a rate cut in September.

Today, however, sentiment remains cautious: expectations are largely priced in, which means any disappointment could trigger sharp profit-taking.

AI stories keep the sector afloat

After Tuesday's close, several major corporate stories emerged. MongoDB shares jumped nearly 30%, and Okta rose by about 6%. Both companies beat expectations thanks to strong demand from developers building AI-based solutions.

This is a key signal: investors are willing to pay a premium for confirmed growth, not just promises.

Cracker Barrel also deserves a mention — its stock rose over 7% after the company decided to scrap its new logo. This shows how sensitive the consumer sector has become — even branding details can move stock prices.

MongoDB: what analysts are saying and how the stock is performing

MongoDB surged thanks to strong results and an upgraded full-year forecast. Subscription revenue and AI-related demand were again the key drivers. In premarket trading, the stock is holding on to most of its gains.

Analysts were quick to upgrade their targets:

• Goldman Sachs raised its target to $325 (buy)
• JMP Securities reaffirmed $345 (market outperform)
• Citi lifted its target to $405 (buy)
• RBC stands at $320 (outperform)
• BMO targets $280 (outperform)

According to aggregated data, the 12-month average price target is around $283–285, with a wide range of estimates — from $170 to $430.

What this means for traders: the "earnings + guidance" rally is validated by major investment firms, but the target spread is wide, so volatility remains. As long as the news-driven momentum continues, the market usually tests nearby resistance zones from recent consolidation areas and offers a second wave of profit-taking near the top targets from lead analysts.

Risk factor – further management commentary or competitive releases in AI infrastructure that could slow the momentum.

Political background adds to market nervousness

On the macro level, attention is focused on the independence of the Federal Reserve. Increased political pressure from the White House has heightened investor nervousness, as any threat to the Fed's autonomy could affect long-term rate and Treasury yield expectations.

This means one thing for the equity market: an even sharper reaction to inflation data.

Nvidia: the litmus test

The main catalyst in the coming hours is Nvidia. The company has become the symbol of the entire "AI rally," and its earnings report will set the tone not only for the tech sector, but for the Nasdaq overall.

The consensus expects revenue around $28 billion and wants confirmation of strong growth in data center demand.

Optimistic outcomes are already priced in — so the reaction will likely be sharp: a positive surprise could push the Nasdaq to new highs, while even a hint of softening demand may trigger aggressive profit-taking.

Technical picture of the stock indices

The S&P 500 is consolidating around 6,470. Resistance is in the 6,470–6,500 zone: a breakout above could open the path to 6,520–6,550. Support levels are at 6,430 and 6,400. The index still has upside potential, but a fresh catalyst is needed to extend the trend.

The Nasdaq 100 is holding near 23,530. Resistance lies between 23,600 and 23,650: a breakout here would set the stage for 23,800. Support is at 23,350 and 23,200. The tech sector remains highly sensitive to news, and Nvidia's report will determine the near-term direction.

Trading plan

While the market waits for Nvidia's report, a tactical approach is to trade from levels and avoid heavy leverage through event risk.

During a breakout above 6,500 in the S&P 500, look for short-term momentum trades with partial profit-taking around 6,520–6,550.

For the Nasdaq 100, wait for Nvidia's reaction:

A solid report + soft PCE data = reversal into growth

Weak Nvidia results or sticky PCE = sharp pullback toward support zones