Nvidia Earnings Loom as US Equity Futures Rise Amid Sector Rotation

US equity futures rose on Tuesday as select technology and AI-linked shares recovered some ground ahead of Nvidia's earnings announcement on Wednesday. The Dow Jones futures added 0.18% to around 53,590, while S&P 500 futures climbed 0.28% to near 7,690, and Nasdaq 100 futures rose 0.58% to about 29,270.

The rebound followed a mixed cash-session close on Monday when the Dow Jones Industrial Average gained 0.26%, but the S&P 500 fell 0.28%, and the Nasdaq Composite dropped 0.76%. Sector performance also diverged, with Consumer Staples outperforming Technology by roughly 3 percentage points.

With Nvidia's earnings on Wednesday, options traders are preparing for heightened volatility in the options market, pricing in a massive implied move of nearly 9.5% for the chipmaker's stock, slightly above its five-year historical earnings day average of 8.2%. To capitalize on this, analysts recommend focusing on short-term straddle or strangle strategies.

Beyond technology, attention is also on US consumer confidence data due Tuesday and the Personal Consumption Expenditures (PCE) price index on Wednesday, which will heavily influence interest rate expectations in the coming weeks. Additionally, Federal Reserve Chair Kevin Warsh is expected to speak at the Jackson Hole symposium this Friday.

The recent rotation where consumer staples outperformed tech by 3 percentage points suggests that institutional money is quietly shifting to defensive positions rather than exiting the market entirely. Historically, the S&P 500 has experienced an average daily swing of 1.4% during the week of Jackson Hole speeches when major monetary policy shifts are teased.