Stock Market Outlook: Nvidia Earnings, Alibaba's AI Investment, and U.S. Inflation Data in Focus

U.S. stock futures pointed higher on Monday as investors braced for Nvidia's (NASDAQ: NVDA) earnings, which could set the tone for AI-related stocks. Meanwhile, Alibaba (NYSE: BABA) announced a $52.4 billion investment in AI and cloud computing, signaling long-term bullish sentiment in tech. Additionally, traders are watching the U.S. personal consumption expenditures (PCE) index, a key inflation gauge, due on Friday.

1. U.S. Stock Futures Rebound

After a weak close last week, Wall Street is attempting a recovery:

• Dow Jones futures: +164 points (+0.4%)
• S&P 500 futures: +19 points (+0.3%)
• Nasdaq 100 futures: +50 points (+0.2%)

Last week's decline was triggered by weak U.S. business activity, heightened inflation expectations, and uncertainty over Trump's tariff policies. This week, investors are eyeing inflation data (PCE index), which could influence the Federal Reserve's rate outlook.

2. Nvidia's Earnings: AI Sentiment in Focus

Nvidia reports earnings on Wednesday, and the results will be critical for the AI sector.

• The stock has soared over 550% in two years, leading the AI boom.
• A low-cost AI model from China's DeepSeek sparked a 17% drop in Nvidia's stock in late January, erasing $593 billion in market value.
• Investors will watch for management's outlook on AI demand and competitive risks.

Nvidia's performance will impact AI-related stocks like AMD (NASDAQ: AMD), Broadcom (NASDAQ: AVGO), and TSMC (NYSE: TSM).

3. Alibaba's $52.4 Billion AI and Cloud Investment

Alibaba unveiled its biggest tech investment ever, committing 380 billion yuan ($52.4 billion) over three years to AI and cloud computing.

• The stock jumped to its highest level since November 2021 after the announcement.
• CEO Eddie Wu called AI a "once-in-a-generation opportunity."
• Alibaba's latest quarterly revenue grew 7.6% YoY to 280.15 billion yuan, beating expectations.

This move signals intensified competition with Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Google (NASDAQ: GOOGL) in cloud computing.

4. Key Economic Events: U.S. Inflation Data

Markets are awaiting Friday's PCE price index, the Fed's preferred inflation gauge.

• A higher-than-expected PCE print could delay rate cuts, pressuring stocks.
• Consumer sentiment has dropped, reflecting worries over inflation and tariffs.

5. Commodities: Gold Holds Gains, Oil Weakens

• Gold: Hovering near record highs amid safe-haven demand due to Trump's trade policies and U.S. economic concerns.
• Oil: Prices dipped as Kurdistan's oil exports may resume, easing supply concerns.

Investor Takeaways

• AI stocks: Nvidia's earnings will dictate sentiment in the sector.
• Tech investments: Alibaba's AI spending highlights strong demand in cloud computing.
• Inflation watch: The PCE index could impact Fed policy and stock market direction.

For deeper financial analysis, track full financials and key metrics of major stocks.