Nvidia’s results, Indian tariffs, French markets - what’s moving markets

Investing.com - U.S. stock futures edged higher Wednesday ahead of the release of key earnings from AI darling Nvidia, which are likely to drive near-term sentiment. Massive tariffs on Indian imports into the U.S. have now taken effect, while the French markets will be in the spotlight given the country’s political instability.

1. Nvidia results in spotlight 

Nvidia (NASDAQ:NVDA), a key barometer of the artificial intelligence (AI) boom, is set to report its fiscal second quarter results after the market close.

After driving markets higher for much of the year, technology stocks have cooled this month as investor enthusiasm cooled. Nvidia’s results are likely to set the tone for near-term risk appetite as they will offer evidence as to whether the sky-high valuation for AI darlings is justified.

Overall, the AI chipmaker is set to report a 53% rise in second-quarter revenue to $46 billion, according to LSEG data, but this may not be enough to keep investors happy given this would still be a far cry from the triple-digit growth it witnessed for many recent quarters.

Investors will also be interested in the company’s outlook, given the fate of Nvidia’s China business hangs on where the world’s two largest economies land on tariff talks and chip trade curbs. 

2. U.S. futures edge higher 

U.S. stock futures edged higher Wednesday, with investors focusing squarely on results from AI darling Nvidia, which is likely to set the tone for the rest of the week. 

At 03:00 ET (07:00 GMT), the S&P 500 futures traded 20 points, or 0.1%, higher Nasdaq 100 futures gained 4 points, or 0.1%, and Dow futures rose 15 points, or 0.1%.

The major indices closed higher Tuesday amid a degree of confidence ahead of Nvidia’s results, with the chipmaker seen as a bellwether in the broader market and a major indicator of AI development.

Nvidia has beaten earnings expectations in 11 of the past 12 quarterly reports.

This week marks the last of August trading, which is historically a rough month for stocks. However, the three main U.S. indexes are on course for gains this month, with the broad-based S&P 500 up 2% this month, the 30-stock Dow Jones Industrial Average gaining 2.9% and the Nasdaq Composite up 2%.

3. Hefty Indian tariffs now in play

U.S. President Donald Trump’s doubled 50% trade tariffs on India have now taken effect as the deadline for the levies passed with no trade deal reached between Washington and New Delhi.

Trump had earlier this month outlined 25% tariffs on Indian exports to the United States, and had said the levy would double to 50% in three weeks as an indication of Washington’s annoyance over India’s continued purchases of Russian oil.

New Delhi was Russia’s second-largest buyer of oil after Saudi Arabia, shipping data for July showed. 

India, along with Brazil, now faces the among highest tariff levels imposed by the United States. 

"We estimate 70% ($55 billion) of India’s exports to the United States are now under serious threat, accelerating downside risks to growth,” said Aastha Gudwani, India chief economist at Barclays: 

"From a ’good friend’ to a ’bad trading partner’, it has come a long way."

4. French political and financial instability 

The French markets will remain in the spotlight Wednesday after Prime Minister Francois Bayrou’s gamble to win backing for his deeply unpopular debt-reduction plan backfired, plunging the country deeper into political and financial instability.

Earlier this week, Bayrou announced a confidence vote on his debt-cutting plan, to take place on Sept. 8. But this proposal was roundly rejected by opposition parties, likely cutting short his brief time as leader of a minority government.

If Bayrou falls, President Emmanuel Macron could dissolve parliament and hold fresh legislative elections or install a new government. However, neither course of action is likely to solve France’s budget issues or political gridlock.

France’s blue-chip CAC 40 is down more than 3% this week, while the gap between French and German 10-year government bond yields, a gauge of the premium investors require to hold French debt, widened on Tuesday to around 79 basis points - its largest since April.

5. Crude to retreat further - Goldman

Oil prices steadied after hefty losses in the prior session as traders weighed hefty new U.S. tariffs on India, the world’s third-biggest crude consumer.

At 03:00 ET, Brent futures slipped 0.1% to $66.66 a barrel, and U.S. West Texas Intermediate crude futures rose 0.1% to $63.27 a barrel.

Both contracts fell over 2% on Tuesday after beginning the week on a two-week high.

Goldman Sachs expects the price of Brent crude futures contracts to decline to the low $50s a barrel by late 2026 due to an increase in the surplus of oil next year.

"We expect the oil surplus to widen and average 1.8 million barrels per day in 2025 Q4 (through) 2026 Q4, resulting in a nearly 800 million barrel rise in global stocks by end 2026," the U.S. investment bank said in a client note on Tuesday.

Goldman said Brent prices are likely to remain near those of forward contracts during the rest of 2025 but fall below those contracts next year as the increase in OECD stock accelerates.

(Reuters contributed reporting.)