The heavyweight technical sector fell 1.6% in the week after a huge run in front of the group, where the key indexes were dragged. The weekly decline of the sector moderated on Friday when shares came in broad lines after comments from the Federal Reserve chairman Jerome Powell seemed to be paving the road for threatening interest rates.
Feeded by its dominant artificial intelligence (AI) products, the enormous stocks of Nvidia have stimulated both the technical sector and the total market in recent years. Last month, Nvidia became the first company with the $ 4 trillion in market value.
Investors are now more “on edge” on their way to the results of Nvidia, said Matthew Maley, main market strategist at Miller Tabak.
“When the group drops and reports the most important shares in the group of income, it will have a greater impact than normal,” Maley said.
The shares of Nvidia have so far increased more than 30% in 2025 and are pushing its profit to more than 1,400% since October 2022. The company established in California has embodied the broader AI twinding that has increased shares of a series of technology companies and others involved in astrastructure and koelse systems. “Nvidia is almost seen as a proxy for what happens in artificial intelligence,” said Matt Orton, main market strategist at Raymond James Investment Management. “There is definitely a reading that happens to the wider AI trade, which has really been the most important driver of the return of the S&P 500 this year.” Analysts said that possible reasons for recent weakness of the technical shares include cautious AI industry developments, including comments from OpenAI CEO Sam Altman that investors may be excited too much about AI. A study by researchers from the Massachusetts Institute of Technology also arouses doubts about the AI Investments return. The results of Nvidia will conclude an American in the second quarter of the American operating result that has largely exceeded expectations and has contributed to supporting shares. S&P 500 business results are on their way to have risen 12.9% from the period of the year, an increase in an expected increase of 5.8% on July 1, according to LSEG IBES.
Goldman Sachs -Strategen has so far been a certain profit strength for the “Magnificent Seven” -the group of MegaCap companies that include Nvidia and Apple and Microsoft. Including estimates for Nvidia, the beautiful 7 are on its way to having an increased profit by 26% compared to 7% for the remaining 493 shares in the index, the Goldman strategists said in a memorandum.
NVIDIA is expected to have an increase of 48% in the profit per share of books with a turnover of $ 45.9 billion for its second tax quarter, according to LSEG data.
Megacap technology companies that focus on AI have recently raised their estimates for capital expenditures, which should be favorable for Nvidia, said Paul Roach, portfolio manager at Allspring Global Investments.
NVIDIA’s “Commentary on the demand side … Should Bullisher be, just because their biggest customers have increased all their Capex guidelines in the past quarters,” Roach said, adding that the demand for Nvidia products is also greater than the biggest technology companies
Economic
Investors will also concentrate on US economic data in the coming week, including consumer sentiment and inflation.
Despite the latest technical decreases, the S&P 500 has declared a profit on the week and about 10% has risen this year, on record -high levels. The industrial average of Dow Jones made a record -high closure on Friday.
Because technical shares fell this week, some investors rotated in other areas of the market that have not been that strong in recent weeks, such as health care and consumer tablets.
But large equity indexes will be difficult under pressure to keep moving higher as Tech Hapert, given his heavy presence in those indexes, Maley said. Tech is by far the largest of the 11 sectors of the S&P 500, with a weight of 33%. Nvidia alone has a weight of almost 8% in the index.
“If these technical shares continue to fall, it means that the indexes will continue to fall,” said Maley. “There is no way around it.”
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