Good morning. As the market buzzes with excitement for Nvidia’s earnings, the Federal Reserve is set to release its latest meeting minutes, and HSBC experiences a significant drop in shares.

Here are the key market movements today.

Spotlight on Nvidia

Dubbed by Goldman Sachs’ trading desk as the “most critical stock on the globe,” Nvidia is at the forefront of market discussions as enthusiasts from various sectors await its earnings announcement. With nearly $200 billion in market capitalization at stake, options market activity suggests an anticipated 11% swing in the stock price post-earnings, which could significantly impact the market. Central to the AI innovation wave, Nvidia’s performance could serve as a crucial indicator for the near-term market direction. After its stock more than tripled in 2023, contributing to a third of the S&P 500’s gains this year, all eyes are on Nvidia.

Insights from the Fed

Amid the Nvidia earnings anticipation, the Federal Reserve’s latest minutes release is somewhat overshadowed. These minutes are expected to reveal the Fed’s stance on potential rate cuts in 2024. Despite recent data suggesting strong inflation and job growth, Bloomberg Economics’ Anna Wong anticipates the minutes will likely downplay these figures. The day also features speeches from Fed officials Raphael Bostic, Thomas Barkin, and Susan Collins, providing further insights into the Fed’s perspective.

HSBC Takes a Hit

HSBC’s shares saw a sharp decline, the most significant in over a year, following a reported 80% drop in fourth-quarter profits due to unforeseen charges related to a Chinese bank investment and the divestment of its French retail banking operations. Although HSBC’s annual earnings reached a record high due to global interest rate increases, the last quarter’s profits plummeted to $1 billion from $5.05 billion a year earlier. CEO Noel Quinn assured that these losses have minimal impact on HSBC’s capital position and will not affect distributions.

Market Downturn

Disappointing earnings from major players like HSBC, Glencore, and Rio Tinto have cast a shadow over the stock market. U.S. equity futures and European stocks experienced declines, while cybersecurity firm Palo Alto Networks saw a 22% drop in premarket trading, potentially marking its largest decrease since March 2017, after revising its annual revenue outlook downwards. This has sparked concerns over reduced tech investment by customers. In commodities, iron ore futures reached their lowest point since October, while the 10-year Treasury yield and the dollar index remained stable.

China’s Market Intervention

In an effort to bolster investor confidence in its $8.6 trillion stock market, Chinese authorities have implemented measures to enhance market stability. This includes stricter regulation of quantitative trading by the country’s main stock exchanges and a temporary account freeze on a leading fund as a severe penalty. Additionally, China has prohibited major institutional investors from reducing their equity positions at the start and end of the trading session, further tightening its control over stock market fluctuations.