US equity investors will focus on Nvidia's (NVDA) earnings this week after Federal Reserve Chair Jerome Powell's signal that the pace of policy easing could be slower than expected undermined the post-election rally.
* Tech giant Nvidia has been one of the main contributors to stock market returns this year. If the chip manufacturer continues to beat and raise -- as it has done in recent quarters -- then the market could get the much-needed ammunition to counter the possibility of slower monetary policy action in the near term.
* Powell, on Thursday last week, said the US economy is "not sending any signals that we need to be in a hurry" to ease monetary policy after October's producer price data released the same day showed sequential acceleration. The consumer price inflation index for the same month rose in line with market expectations last week.
* US equity indexes closed mixed last week amid concern economic strength could temper the speed at which the central bank plans to ease policy. The Fed has cut interest rates by 50 basis points in September and 25 basis points in November. As per the FedWatch Tool Early Monday, the highest probability is 30% for interest rates to be cut by 75 basis points by the end of 2025.
* The 10-year Treasury yield rose by 1.1 basis points to 4.44%, trading close to its highest levels in H2, reflecting the impact of potential stumbling blocks arising on the policy path and broader concern related to inflationary policies that could potentially emanate from the Trump administration.
* In addition to Nvidia, other companies reporting quarterly results include Walmart (WMT), TJX Companies (TJX), Target (TGT), Snowflake (SNOW), and Palo Alto Networks (PANW).
* Apart from Fed speak, investors will monitor macroeconomic data relating to building permits, initial jobless claims, and global purchasing managers indexes to gauge the strength of the US economy.
