U.S. stock index futures saw a modest increase in Sunday evening trading, finding their footing after a session marked by losses due to a stronger-than-anticipated rise in the Producer Price Index (PPI). The spotlight now shifts towards a series of crucial earnings reports set for release this week.

Trading volumes remained subdued in anticipation of a holiday on Monday.

The S&P 500 futures were unchanged, whereas futures for the Nasdaq 100 and Dow Jones Industrial Average experienced increases of 0.2% and 0.1%, respectively. Each of these indicators continued to hover near record highs reached earlier in February.

U.S. stock indexes took a hit from near-record levels on Friday following the release of January’s PPI data, which indicated a hotter inflationary trend than expected. This stoked fears that persistent inflation could prompt the Federal Reserve to maintain higher interest rates for an extended period this year.

The S&P 500 dropped by 0.5% on Friday, with the NASDAQ Composite and Dow Jones Industrial Average falling by 0.8% and 0.4%, respectively.

This PPI report came on the heels of a robust Consumer Price Index (CPI) reading, which had already significantly pulled U.S. stocks down from record highs.

Nvidia, Walmart Earnings on the Horizon

However, the U.S. stock market faces a battery of key earnings reports this week, expected to play a pivotal role in validating whether the recent rally on Wall Street has merit.

Fourth-quarter earnings from semiconductor giant NVIDIA Corporation (NASDAQ:NVDA), scheduled for release after market close on February 21, will be in the limelight. Nvidia has been at the epicenter of a substantial rally fueled by escalating excitement over artificial intelligence, with investors keenly awaiting the company’s earnings and outlook for further insights into the trajectory of AI-driven demand.

The chipmaker is anticipated to report earnings per share (EPS) of $4.63 on revenue of $20.52 billion. Ahead of the earnings announcement, several analysts have upped Nvidia’s target price while maintaining buy or outperform ratings on the stock.

Major retailer Walmart Inc (NYSE:WMT) is set to unveil its fourth-quarter earnings on February 20, before the market opens. Walmart is often viewed as a crucial indicator of U.S. consumer spending strength, which is intimately linked to inflation expectations.

Despite a gradual easing in consumer spending amidst ongoing inflationary pressures and high-interest rates, Walmart has managed to sustain steady earnings growth in recent quarters.

The retail behemoth is expected to post an EPS of $1.65 on revenue of $169.3 billion.

Beyond earnings, preliminary Purchasing Managers’ Index (PMI) data for February is also anticipated to shed light on the U.S. economy later this week. Additionally, the minutes from the Fed’s February meeting are slated for release, expected to provide further guidance on the trajectory of U.S. interest rates this year.

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