Martin Gamble on US markets: confusion at Nvidia with Wall Street in retreat

US stock markets fell for the third consecutive week as tensions in the Middle East escalated, while bond yields went up on inflation fears.

The Federal Reserve’s interest rate meeting saw policy makers vote 11-to-one to keep rates unchanged with Trump appointee Stephen Miran, once more, calling for a rate cut.

The central bank also revealed its latest summary of economic projections which showed one interest rate cut for 2026, higher growth and inflation, while unemployment was expected to remain stable.

Meanwhile, market-implied interest rate cuts were pushed out to the middle of 2027 as investors weighed the possible impacts from rising energy prices.

The Bureau of Labour Statistics revealed that producer prices for February increased more than expected to 3.4% year-on-year, the highest rate since February 2025.

Flash memory chip makers SanDisk and Western Digital saw their shares up in double-digit percentages buoyed by increased demand for AI data centres.

Paramount Skydance continued to see weakness following its leveraged buyout of Warner Bros Discovery, with the shares making new 52-week lows.

Why Nvidia’s forecast was an upgrade even though it wasn’t

Nvidia CEO Jensen Hwang created a stir this week after saying he expects the company to reap “at least” $1 trillion in revenues through 2027, before adding: “I am certain computing demand will be much higher than that.”

The shares initially moved around 3% higher, suggesting investors may have interpreted the trillion-dollar forecast as an annual number, but it appears Hwang was referring to cumulative revenues for 2025 through to 2027.  

With $216 billion already booked in 2025, Stockopedia data shows analysts are forecasting revenues of $363 billion for 2026 and $472 billion for 2027, equating to $1.1 trillion of cumulative revenues.

However, Hwang wasn’t merely reiterating consensus forecasts, as he later clarified in a press conference, the $1 trillion figure only referred to Nvidia’s latest chips and excluded revenues from operating systems needed to run them as well as storage.

Ironically, Hwang said he excluded the peripheral revenues to avoid confusion. When the dust settled, Nvidia’s shares ended the week lower than where they started.

Bellwether FedEx delivers with earnings

Delivery outfit FedEx is often seen as a barometer for the global economy given the depth and breadth of its operations. In that context, its’ robust third-quarter results (19 March) and an indication that demand is holding steady despite the conflict in Iran might offer broader reassurance.

The company raised its full-year profit guidance thanks to healthy demand and continuing tight control on the purse strings and the shares were up 9% in after-hours trading.

FedEx passes on energy costs through a fuel surcharge which should insulate it to an extent although if demand suffers significantly that would obviously hurt the business.

FedEx’s Express division posted better operating results in the third quarter, driven by firmer US and international package pricing, increased domestic volumes and continued cost reductions.

FedEx is engaged in a multi-year turnaround plan that involves cutting billions in expenses, merging its separate Ground and Express delivery services, automating parts of its operations and spinning off its Freight trucking unit at the beginning of June 2026.

Micron having to spend money to make money

The surge in Micron’s share price over the last 12 months meant a pause for breath was always a possibility after its latest quarterly results and so it transpired.

The memory and storage technology play is seeing huge demand linked to the expansion of artificial intelligence. That was evident in the results which revealed a big increase in spending to meet this demand.

This overshadowed some impressive numbers with earnings per share and revenue both coming in significantly ahead of expectations. Earnings were $12.20 versus the $9.31 which analysts had pencilled in and revenue was $23.86 billion against the $20.07 billion which had been anticipated.

Forecasts for the current quarter imply revenue of $33.5 billion, up 200% year-on-year, and adjusted earnings of $19.15. Again, both were significantly ahead of what analysts had been forecasting.

“The company Is having to spend money to make money though and spending for the year to 31 August 2026 is set to increase $5 billion to a total of $25 billion with further increases planned for the 2027 financial year.