U.S. index futures barely moved on Wednesday, and investors appear to be on the sidelines awaiting Nvidia’s results after the close of trading, which will shed light on artificial intelligence-related trading.

The rotation in technology stocks intensified earlier this week in the wake of growing conviction that the Federal Reserve will cut interest rates next month. This idea also supported flows into the most volatility-sensitive sectors, which helped Wall Street indices reach record highs.

Nvidia Results Will Give More Signals on Artificial Intelligence

Nvidia Corporation (NVDA), the world’s most valuable chipmaker, will release its second-quarter results after the close of trading. The company is expected to post earnings per share of $0.644 and revenue of $28.68 billion, with both numbers expected to improve compared to the last quarter.

Nvidia shares fell slightly in after-market trading, though so far in 2023 they have experienced a nearly 160% rise as the company has benefited in large part from increased investment in artificial intelligence. As the maker of the most advanced artificial intelligence chips on the market, Nvidia is seen as a bellwether for AI demand.

Nvidia’s gains also come after reports from other major tech companies suggested that AI may not become as significant a profit driver as initially believed, a notion that had led to steep losses in tech valuations the previous month.

Wall Street Moves on Rate Cut Bets, S&P 500 and Dow Jones at Record Highs

Although there is uncertainty surrounding Nvidia and the rotation in tech stocks, Wall Street indexes closed at record highs on Tuesday, supported by expectations of interest rate cuts, even more so after the Federal Reserve took a dovish tone in its latest comments.

The S&P 500 rose 0.2% and was able to close at an all-time high of 5,625.80 points, while the Dow Jones Industrial Average reached an all-time high of 41,250.50 points during Tuesday’s trading. The NASDAQ Composite index rose as much as 0.2% to 17,755.58 points, although it remained below its recent highs.

According to the CME Fedwatch tool, investors are almost entirely estimating a September rate cut, although they are divided on the reduction as some think it will be 25 basis points and others 50 basis points.

The PCE price index data, which is the Fed’s preferred indicator, will be released this week and is expected to give more signals on the rate cut.

Also, unemployment claims data will be released this Thursday. This data may influence expectations for a cut, especially amid growing anxiety that the labor market appears to be cooling faster than widely believed.