By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -U.S. stock index futures treaded water on Wednesday as investors awaited Nvidia's quarterly results, seen as pivotal in sustaining the AI behemoth's record rally, while retailer Target (NYSE:TGT)'s shares fell after a disappointing forecast.
Nvidia is scheduled to report results after the bell and its shares were up 0.3% in premarket trading, after jumping nearly 5% in Tuesday's session.
Options traders are primed for a nearly $300-billion swing in the company's market value after the results, with options implying an 8.5% swing for the shares in either direction.
"The strong AI demand, particularly for Nvidia’s Blackwell chips, and the robust results from TSM, that builds its chips, hint (Nvidia) results will probably meet and beat expectations," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"But it's hard to say that good results will lead to a good market reaction. Blackwell delays are the most obvious thing that could go wrong."
Nvidia, which has nearly tripled in value this year, accounted for about 20% of the S&P 500's returns over the past year, according to BofA Global Research. The market's reaction to its results is expected to be crucial in determining Wall Street's trajectory as the year winds down.
Meanwhile, Target plunged 17.8% after the retailer forecast holiday-quarter comparable sales and profit below Wall Street expectations after missing third-quarter estimates.
Retailers such as Dollar Tree (NASDAQ:DLTR) and Dollar General (NYSE:DG) fell 3.7% and 4.6%, respectively, while Walmart (NYSE:WMT) shed 0.7%.
Other megacaps were mixed, with Microsoft (NASDAQ:MSFT) up 0.7%, while Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) fell 0.3% each.
At 07:03 a.m., Dow E-minis were up 101 points, or 0.23%, S&P 500 E-minis were up 9.75 points, or 0.16%, and Nasdaq 100 E-minis were up 43 points, or 0.21%.
Nvidia's gains on Tuesday helped the benchmark index and the tech-heavy Nasdaq close higher despite concerns about escalating Russia-Ukraine tensions hitting risk assets during early trading.
Some soothing of geopolitical worries also buoyed stock futures on the day after Reuters reported Russian President Vladimir Putin was open to discussing a Ukraine ceasefire deal with Donald Trump.
Cryptocurrency stocks ticked higher as bitcoin briefly jumped above $94,000, with MicroStrategy and MARA Holdings up 3.1% and 2.4%, respectively.
Comments from Federal Reserve officials including Lisa Cook, Michelle Bowman and Susan Collins are expected through the day, while Vice Chair for Supervision Michael Barr is scheduled to testify before the House Financial Services Committee.
Investors are also watching U.S. President-elect Trump's cabinet picks keenly for clues on the future policy stance.
Trump is expected to announce his pick for Treasury secretary soon. He said on Tuesday he would nominate Cantor Fitzgerald CEO Howard Lutnick to lead his trade and tariff strategy as head of the Commerce Department.
Comcast (NASDAQ:CMCSA) gained 2.6% after sources said the company was moving forward with plans to spin off its NBCUniversal cable television networks, including MSNBC and CNBC.
Delta Airlines (NYSE:DAL) lost 3.5% after it said it expects 2025 revenue to grow by a mid-single-digit percentage.