Nvidia earnings to test AI rally as markets watch

European markets are expected to open lower on Wednesday, tracking losses from Wall Street amid rising bond yields and ahead of Nvidia's highly anticipated first-quarter earnings report. The euro zone's Euro Stoxx 50 futures fell 0.75 percent, while the US 30-year Treasury yield touched 5.197 percent, its highest level since July 2007, driven by persistent inflation concerns. Meanwhile, China's central bank kept its benchmark lending rates unchanged at 3 percent for the one-year loan rate and 3.5 percent for the five-year rate, maintaining its accommodative monetary stance to support economic growth. Nvidia has emerged as the central focus for investors, with its quarterly results serving as a crucial barometer for the artificial intelligence cycle that has propelled US markets to record highs. Analysts expect the chipmaker to report approximately $79 billion in revenue, roughly 80 percent higher than the same quarter last year, with profit margins hovering around 75 percent. Danni Hewson, director of financial analysis at AJ Bell, described the results as "essential," noting that Nvidia has become "the main thermometer" for the AI cycle. Any commentary on China and chip export restrictions will be closely watched, following last week's US authorization for the sale of H200 chips to several Chinese companies including Alibaba, Tencent, ByteDance, and JD.com. In a separate development, the IPO market is experiencing a significant revival following Cerebras Systems' successful public listing, which raised $6.4 billion in the largest semiconductor IPO in history. The company's shares surged 68 percent on their first trading day, valuing the startup at approximately $70 billion. Bankers expect the IPO wave to accelerate, with SpaceX's listing expected in June and potential offerings from Anthropic and OpenAI, which could push total 2026 fundraising close to the 2021 record of $156 billion. Rob Stowe, head of equity capital markets at Barclays in the Americas, noted that activity levels and investor participation "recall exceptional years like 2021," with healthy demand extending beyond technology into healthcare, real estate, and clean energy sectors.