S&P 500 Forecast: Index tests 6000 level as Nvidia rallies ahead of earnings

US indices traded higher, tracking firmer European markets. Investors are feeling optimistic as they anticipate quarterly earnings from AI favourite Nvidia, due for release after the closing bell. Nothing else seems to matter today, and there is not much on the economic calendar to shift the focus away. So, earnings from Nvidia and the performance of the technology stocks in general is what will impact the S&P 500 forecast.

It is all about the tech sector and Nvidia today

Technology stocks remain at the centre of market volatility, with recent losses keeping investors on edge. But today, the sector is bouncing back, shaking off concerns about the latest US crackdown on China’s technological progress. Stocks of chipmakers were rebounding along with Nvidia, which was up a good 4% at the time of writing, making back its losses from the previous session.

Semiconductor giant Nvidia saw its shares bounce off the 200-day average near $126.00 area, but the real test will come when cash markets close. With Nvidia’s highly anticipated earnings report due after the bell, another round of turbulence could be on the cards if the figures disappoint. Given the company’s outsized influence on broader indices, its results could prove pivotal. A strong earnings release might be just what’s needed to push the S&P 500 back towards record highs.

Nvidia is expected to report fourth-quarter revenue of $38.25 billion, with $34.06 billion stemming from its data centre division—a staggering 72% increase. Earnings per share are forecast at 85 cents, marking a 63% rise year-on-year.

Investors will be watching closely for any signs that Nvidia’s key customers are reining in spending after years of hefty capital outlays. Such a shift would be particularly concerning in light of DeepSeek’s disruptive influence and the rise of its low-cost AI model.

Key events to watch later this week: GDP and core PCE

Once we have the NVidia earnings out of the way, the focus will turn back to tariffs and Ukraine peace talks. On the macro calendar, Thursday brings US GDP data and initial jobless claims, accompanied by more Fed speeches. On Friday, attention will turn to the Fed’s preferred inflation gauge—the core PCE price index—along with a few second-tier data releases.

Technical S&P 500 forecast: Watch the 6K hurdle closely

Source: TradingView.com

The S&P 500 managed a respectable rebound from lows of yesterday, when it tested – and held – prior support around 5915. That drop meant that the index had reached its near-term downside target after creating a bearish candle last Friday. But after three consecutive down days, short-term overbought conditions have been alleviated somewhat, and that has allowed the index to start climbing again. Now, the index back around the psychologically significant 6000 level again, and whether it can hold above this level or go below it will have some implications for the near-term trend direction.

If the index holds above 6000 on a closing basis, i.e., after the release of NVidia earnings, then that would be seen as a constructive development.

In this potential scenario, the next immediate resistance is seen at 6033 and 6075—both of which were previously key support zones that could now act as barriers to further gains.

Conversely, a decisive close below that 6K mark could see the S&P 500 test the 5915-5880 support zone next. And then, a potential breach of this area could bring 5780 into play, with 5738—the 200-day moving average—emerging as a key longer-term support level.

Whether you’re bullish or bearish, caution is warranted. The remarkable strength of equities in recent months suggests that any downside should be approached with care. For the bulls, a corrective move lower wouldn’t be unwelcome, as it could present more attractive entry opportunities in the future. But today, everything else may well play second fiddle to Nvidia’s earnings result.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R