Wall Street Braces For Nvidia Earnings Amid Nerves Over High AI Valuations; Nasdaq Futures Steady

US stock futures inched higher in pre-market session ahead of key earnings on Wednesday, Nov. 19 after global shares fell for a fifth day led by European stocks on a selloff driven by nerves over high AI valuations. Investors are cautious ahead of what could be make-or-break earnings from AI chip titan Nvidia later today.

The tech-heavy Nasdaq fell 1.2% overnight, marking a second straight daily decline. Worries about lofty valuations have knocked it more than 6% below late October's record peak. In the European morning, S&P 500 futures and Nasdaq 100 futures inched higher after trading flat.

Concerns over high valuations and dwindling expectations of a December interest rate cut have hit the US stocks' rally off late, with the S&P 500 recording its fourth consecutive day of losses on Tuesday. As of last close, the US benchmark has dropped nearly 4.4% from its October peak and stands 12.5% higher on a year-to-date basis.

Megacap stocks traded in the flat-to-higher band during premarket, with Alphabet leading gains with a 1.5% rise. S&P 500 E-minis were up 17 points, or 0.26%, Nasdaq 100 E-minis were up 74 points, or 0.3%, and Dow E-minis were up 49 points, or 0.11%.

The STOXX 600 fell 0.2%, having fallen 4% from record highs less than a week ago, while in Asia, Japan's Nikkei ended the day down 0.34%, bringing losses for November so far, in US dollar terms, to 7%.

MSCI's All-World index was down another 0.1%, easing for a fifth straight session in its longest stretch of daily losses since August, showed Bloomberg data.

The Japanese yen , which was trading around 155.64 on Wednesday, has given up almost all of this year's gains against the dollar and prompted officials in Tokyo to warn about the prospect of intervention.

Nvidia's approximately 8% weighting in the S&P 500 Index and its market leadership in AI give the results added significance. Nvidia's results are seen as a litmus test for US markets as the AI-driven rally has pushed benchmarks to record highs this year.

The fate of Wall Street's staggering bets on AI rests on Nvidia when the world's most valueable company reports results, with investors seeking signs that bubble worries are overblown.

Nvidia which sells the graphics processing units underpinning artificial intelligence, has been at the heart of a rally that has carried stock markets around the world to all-time highs and lifted any stock with even tangential links to AI.

Nvidia options implied about a 7% move for the stock in either direction after it announces its quarterly results, Reuters said citing data from analytics firm Option Research & Technology Services (ORATS).

At Nvidia's current market value of about $4.6 trillion, the options-implied move would represent the largest one-day market value change following quarterly earnings for the AI bellwether, as per Reuters.

Nvidia shares were little changed in Frankfurt, pointing to a smooth start to trading in the US pre-market later. According to analysts, Nvidia results could set the tone for risk sentiment for the near term, and not just in equities.

Shares of the AI giant inched 0.4% higher in premarket trading after falling about 4.6% in the last two sessions. Nvidia shares, up about 38% for the year, have retreated about 10% since hitting a record high in late October.

The US dollar has fallen by 8.1% this year, heading for its worst performance against a basket of currencies since 2017. Year-to-date losses topped more than 10% in October, but the dollar has been steadily rising since then, as uncertainty over the economic outlook and persistent inflation have tempered expectations for rate cuts and the stock market bull run has started to stall.

Investors also worry that US President Donald Trump's falling approval rating could drive fiscal spending and possibly stoke inflation, which has kept safe-haven US Treasuries in check.

The benchmark 10-year note was steady at 4.12%, having barely moved so far this month. As per Reuters, markets are pricing about a 42% chance of a 25-basis point Federal Reserve rate cut in December, something that was priced as a near certainty a month ago.

Later in the day, minutes from the Fed's October policy meeting - where the central bank cut rates by an expected 25-basis-points - would be on investors' radar.

Bitcoin has recovered slightly from Tuesday's seven-month lows to trade at $91,400. That's still down about 27% from October's record high. In commodities, gold, which scaled record highs alongside stocks in October, has also fallen. It was last up 0.4% at $4,080 an ounce, while Brent crude futures eased 0.76% to $64.41 a barrel after China made hefty purchases of US supplies.