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There is a rebound bid in the equity futures market being led by none other than NVIDIA (NVDA), which is up 2.5% ahead of its quarterly results after today's close. That report will be the most watched, most dissected, most talked about report this entire reporting period because of how much AI optimism is tied up in NVIDIA's market capitalization and other stocks that have piggybacked off its leadership.
Ironically, NVIDIA has been one of the biggest drags on the market-cap weighted S&P 500 and Nasdaq Composite during their four-session losing streaks. Over that time, NVDA has dropped 9.1%.
This morning's rebound effort, then, is a bit of gamesmanship ahead of a report that some participants believe will get NVIDIA's stock, and the stock market, back on a winning track. They may very well be right, but some previews suggest this report -- and more specifically the guidance -- may not have the same jaw-dropping, wow factor as the company's previous reports.
How investors respond to NVIDIA's results will set the tone for the broader market. That might sound somewhat ominous in the event NVIDIA disappoints somehow, but keep in mind that the equal-weighted S&P 500 increased 0.1% yesterday when NVIDIA fell 2.8% and Tesla (TSLA) dropped 8.4%.
The point is that a disappointment by this mega-cap leader doesn't necessarily have to translate into a big loss for the broader market. It could, but it could also spark a continued rebalancing out of mega-cap names into other parts of the market.
Thus far, that has been the playbook for the market in 2025. The Vanguard Mega-Cap growth ETF (MGK), which we will use as a proxy for the mega-cap cohort, is down 0.9% year-to-date, whereas the market-cap weighted S&P 500 is up 1.3% and the equal-weighted S&P 500 is up 2.8%.
Today's open should have a more inclusive feel to it. Currently, the S&P 500 futures are up 24 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 123 points and are trading 0.6% above fair value, and the Dow Jones Industrial Average futures are up 65 points and are trading 0.2% above fair value.
Aside from the role NVIDIA and other mega-cap stocks are playing in this morning's equity futures trade, there is also some general rebound interest that has been helped by earnings reports from the likes of Lowe's (LOW), CAVA Group (CAVA), Axon Enterprise (AXON), TJX Cos. (TJX), and Workday (WDAY).
Super Micro Computer (SMCI) is another pre-market fan favorite after the company avoided Nasdaq delisting by filing its Form 10-K for FY24 and Forms 10-Q for 1Q25 and 2Q25.
Another component helping to boost sentiment is the news that the House passed its resolution (217-215) for one, large reconciliation bill. That resolution, which calls for $4.5 trillion in tax cuts and a $2 trillion reduction in spending over a decade, now heads to the Senate for consideration. If passed there, the House and Senate will start drafting the actual legislation.
That will set things up presumably for another close vote in the months ahead, but for now, the stock market is liking the sound of tax cuts and isn't having to contend with deficit dismay in the Treasury market, which has remained calm in today's action.
The 2-yr note yield is up one basis point to 4.11% and the 10-yr note yield is down one basis point to 4.29%. The market will soon be digesting the January New Home Sales Report (Briefing.com consensus 681,000; prior 698,000) at 10:00 a.m. ET and the $44 billion 7-yr note auction results at 1:00 p.m. ET.
