Stocks flat ahead of Nvidia earnings, US economic data

The Dow Jones Industrial Average nudged up 0.01% to 41,246.40, the S&P 500 eased 0.23% to 5,612.94 and the Nasdaq Composite was down 0.66% at 17,637.45.

Europe's benchmark STOXX index climbed 0.47% to a one-month high, boosted by technology shares. Japanese stocks closed 0.22% higher. MSCI's gauge of all stocks across the globe was 0.05% lower at 830.43, but still near the record close of 831.34 reached on Aug. 23.

Nvidia's market value has ballooned, thanks to its dominance of the computing hardware behind artificial intelligence. The stock price is up some 3,000% since 2019 and with a market capitalisation of $3.2 trillion, a move in its share price affects the broader market.

The chipmaker's second-quarter revenue will likely double, though even that may disappoint expectations. Options pricing shows traders anticipate a near 10% - or $300 billion - swing in market value, likely the largest earnings move of any company, ever.

"Everyone is thinking about Nvidia's earnings later today," said Michael Ashley Schulman, chief investment officer at Running Point Capital in Los Angeles, adding that there was perhaps more apprehension about the numbers than about Federal Reserve Chair Jerome Powell's Jackson Hole speech on Friday.

"As Nvidia goes, that's an indicator for the rest of the technology industry. And technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent."

Any disappointment in Nvidia's results could hurt megacaps and other semiconductor stocks, which have led 2024's rally on the prospect of AI integration boosting corporate profits.

"People don't want to make a major move ahead of a large announcement, and Nvidia's announcement is considered large," Schulman added.

A preliminary estimate of second quarter U.S. gross domestic product is due later this week, along with the Fed's preferred inflation measure - the core personal consumption expenditures (PCE) index.

The yield on benchmark U.S. 10-year Treasury notes fell 0.8 basis points to 3.825%.

After a recent run of declines, the dollar was advancing. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.37% to 100.98, with the euro down 0.5% at $1.1128.

Gold prices were hurt by the stronger U.S. dollar with spot gold down 0.75% at $2,505.75 an ounce and U.S. gold futures 0.6% lower at $2,537.60.

Oil prices fell on concerns about Chinese demand and risks of a broader slowdown. Brent crude futures traded 1.02% lower at $78.74 a barrel, while U.S. West Texas Intermediate crude futures fell 1.14% to $74.66. [O/R]