) results in the coming week could guide the U.S. stock market on its next path, as investors turn their focus to the technology sector and artificial intelligence trade after an election-fueled rally stalled.
The benchmark S&P 500 has pulled back from record highs following the Nov. 5 U.S. election that gave Donald Trump a second term as president and his fellow Republicans control of Congress. However, after soaring past analysts’ earnings estimates last year, Nvidia’s surprises have become more modest, with earnings beating by 6% in its most recently reported quarter, LSEG data showed.
As in recent quarters, results from Nvidia and a small group of other megacap tech and related companies are carrying the load. Those so-called Magnificent 7 companies, which also include Apple and Microsoft, are expected to have increased earnings by 30% in the third quarter compared to 4.3% for the other 493 companies in the index, said Tajinder Dhillon, senior research analyst at LSEG.
The benchmark index is up 23% this year. Trump’s victory initially sparked broad stock gains on optimism about his agenda of lower taxes and deregulation. Stocks also fell after Federal Reserve Chair Jerome Powell said on Thursday that the central bank does not need to rush to lower interest rates, which will keep monetary policy at the forefront for markets in coming weeks.