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25.02.2025 02:01 PM
Nvidia, Palantir, and Microsoft weigh on Nasdaq: What's next - another dip or a rebound?

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The US stock market is facing uncertainty. Following a wave of sell-offs triggered by a decline in stocks of tech giants and AI-focused companies, futures remain stable, but macroeconomic pressures and corporate earnings reports continue to weigh on the market.

Investors are keeping a close eye on the upcoming earnings reports from Nvidia, Salesforce, and Home Depot, as well as potential escalation in trade tensions between the United States and China.

Technical analysis

The S&P 500 is hovering around 5,990 points on Tuesday, continuing its downward correction. The index fell 0.5% in the previous session, marking the third consecutive day of losses.

In the short term, the key support level remains at 5,950 points, a break below which could accelerate the downward move to the 5,900 mark. The 6,020 level can be seen as resistance. A firm break above it could open the path to 6,100 points.

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The Nasdaq 100 is trading at 21,320 points, still under pressure from weakness in the tech sector. The index dipped 1.21% on Monday, closing below the short-term moving averages.

The nearest support lies at 21,200. A break below this level could send the index down to 21,000. Key resistance is at 21,500, and overcoming this level could reignite buying activity.

What is happening in the technology sector?

A breakdown in positive sentiment among tech giants has been one of the main drivers of Nasdaq's decline. Palantir lost 10.5% and is now down nearly 30% from its high.

Nvidia's stock dropped 3.1% ahead of its earnings report due Wednesday. Investors are concerned that a slowdown in data center spending could impact demand for GPUs.

On the other hand, Apple gained 0.6% after announcing an ambitious plan to invest $500 billion in the US economy over the next four years and hire 20,000 new employees.

Macroeconomic uncertainty

The market is also facing pressure from reports about a possible escalation in the tariff war. JPMorgan's recent client note warned of risks associated with further tariff hikes and anti-free trade rhetoric. The Trump administration is considering new sanctions against China, which has already had a negative impact on Alibaba's stock, pushing it down by 9%.

Expectations for corporate earnings reports

Home Depot will release its earnings report before the market opens on Tuesday. Analysts expect earnings per share of $3.04, with revenue of $39.07 billion. The impact of inflation on consumer spending remains a risk, but natural disasters in the United States could support demand for home improvement products.

Nvidia will announce its financial results on Wednesday after the market closes. The consensus forecast expects a 63% increase in earnings and a 73% rise in revenue, making this report a key indicator of the AI sector's resilience.

Wedbush analysts are confident that demand for the new Blackwell GPU series remains strong, despite Microsoft's cautious stance on capital expenditures.

Salesforce will also release its earnings report on Wednesday. The focus will be on the growth rate of the Agentforce AI platform. If the number of new customers exceeds expectations, the stock could gain further upside momentum.

So, the stock market is balancing between corporate earnings reports, geopolitical risks, and technical support levels. Technical analysis points to continued pressure on the indices, and upcoming reports from Nvidia and Salesforce could shape the short-term direction of the market.

In the coming days, the 5,950 level for the S&P 500 and the 21,200 level for the Nasdaq 100 will be the key areas that will determine the next moves.

Natalya Andreeva,
Analytical expert of InstaForex
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