This Week: Markets prepare for Nvidia, Federal Reserve, and PCE reading

The upcoming events of the FOMC minutes release, US PCE reading, and Nvidia earnings report could have a significant impact on the financial markets this week. These crucial releases will play a pivotal role in shaping the future trajectory of the US economy, affecting the US dollar index (USDInd), US500 index, and Nvidia stocks.

Market sentiment has been dampened by concerns over the rising US fiscal deficit following the implementation of President Trump’s tax cuts, along with Moody’s downgrade of the US sovereign credit rating. In addition, geopolitical tensions and trade risks continue to loom large in the background, adding to the uncertainty surrounding the markets.

The FOMC minutes scheduled to be released on Wednesday will be closely scrutinized for any signals pertaining to the Federal Reserve’s stance on interest rates. A hawkish tone could strengthen the US dollar, potentially pushing the USDInd towards its 21-day SMA. Conversely, a dovish tilt might trigger a pullback towards the year-to-date lows around 98.0.

On the same day, Nvidia will be reporting its Q1 FY2026 earnings, with the stock expected to swing approximately 6.79% up or down in reaction to the results. While analysts anticipate an increase in both revenue and earnings per share, investors will be keeping a close eye on Nvidia’s challenges in the Chinese market and the company’s forward guidance.

Friday’s release of the US PCE reading, which is the Federal Reserve’s preferred inflation gauge, will also be a key event impacting the US500 index. Any signs of continued pricing pressures in the data could lead to a change in the trajectory of rate cuts, potentially pushing the US500 lower towards its 21-day SMA. Conversely, a softer reading may boost risk sentiment, allowing the US500 to rebound towards the 6,000 level.

In addition to these major events, a plethora of economic data and events are scheduled throughout the week, ranging from central bank speeches to key economic indicators across different regions. Investors will need to carefully navigate through these events and data releases to gauge the overall market sentiment and make informed decisions regarding their investments.

Overall, this week promises to be a crucial one for the financial markets, with a myriad of events and data releases that could potentially shape the future trajectory of the US economy and global financial markets. Stakeholders will be closely monitoring these developments to stay ahead of the curve and adjust their investment strategies accordingly.