Warning. Warning. Volatility is about to hit the markets. The TPP trading update.

Nvidia releases earnings later today and anything could happen.

It’s been a tough year for big tech so far. Tesla is down over 21% (we aren’t surprised by this as it is probably one of the most overvalued companies in the S&P 500). The Magnificent 7 CNBC ETF was down around 4% and this is despite a stellar performance from Meta.

Later today, we will get the earnings from Nvidia, the most watched AI company of all. This week US equities have struggled as tech has fallen but they advanced a little ahead of the report which could help reignite the artificial intelligence-driven rally………or make it stutter further; the problem all traders have is nobody knows.

Just hours ahead of results from the giant chipmaker that’s powered the AI revolution, big tech led a small rebound but with no real conviction. Nvidia, which had been under pressure this year after an over 1,000% surge from its bear-market low, jumped 4% Wednesday. Trading in the options market suggests investors are pricing in a potentially 10% move in Nvidia’s shares after its upcoming numbers. That’s a valuation shift of around £240 billion one way or the other!

Reports from the leader in AI chips have become some of the most important events of the year for Wall Street. Nvidia’s fourth-quarter earnings due after Wednesday’s close may be its most critical yet, coming after the emergence of China-based startup DeepSeek scrambled the outlook for AI infrastructure needs.

“Nvidia is the bellwether and market-darling stock that is of vital importance to the broader markets,” said Chris Brigati at SWBC. “Its performance provides meaningful guidance for the broader market tone.”

“The reality is, we need a good set of numbers from Nvidia to keep this bull track in place in the US,” said Guy Miller at Zurich Insurance Co. “It will be important that the numbers are good and the outlook is good. If it’s a really disappointing reading the market will be vulnerable to a further setback.”

Nvidia’s results will land at a time when investors are increasingly on edge over lofty valuations and uncertainty about massive spending on artificial intelligence. Over the past two years, Nvidia has led the AI trade and fellow US megacaps have benefited from the trend.

In other US corporate news, Amazon rebooted Alexa with AI. Super Micro Computer surged 19% after submitting outstanding financial reports to become compliant with Nasdaq rules. AppLovin pared losses after reports from two short sellers spurred a plunge of as much as 23%.

In Europe stocks have been a bit more steady. Indices are always affected by the US and will undoubtedly move this evening even though the cash markets will be closed. Why do Nvidia results affect the FTSE 100? Well, they shouldn’t, but they do. If Nvidia falls, buyers of any shares will move swiftly into hiding. This is true the other way as well, if Nvidia does well, then all indices will likely rise overnight. All eyes on Nvidia.

In UK equities shares in Aston Martin Lagonda fell on Wednesday as the luxury car maker announced plans to axe around 5% of its global workforce in a bid to cut costs, and reported a widening of its losses. In results for the year to the end of December 2024, the car maker said it was kicking off a process "to make organisational adjustments, to ensure the business is appropriately resourced for its future plans".

This will mean the loss of around 170 employees, which it expects to lead to savings of around £25m, 50% of which will be realised in FY 2025. The company said pre-tax losses widened to £289.1m from £239.8m the year before, with revenue down 3% to £1.58bn and wholesale volumes 9% lower at 6,030. The car maker also said on Wednesday that it was delaying the launch of its first electric vehicle for the second time, to "the latter part of this decade". It had previously pushed back the launch to 2027.

Aston Martin struck an upbeat note on the outlook, however, saying it expects to make "significant" improvements across all key financial performance metrics in 2025. It expects to deliver positive adjusted EBIT in FY 2025 and free cash flow in the second half.

BP announced it is to slash its investments into low-carbon and alternative fuels and raise its spending in oil and gas as part of a fundamental "reset" to its strategy, the energy giant revealed on Wednesday, causing shares to drop into the red.

The moves are part of a plan to significantly reallocate capital to grow free cash flow, returns and long-term shareholder value, BP said, with structural cost reductions of £3–4bn expected to be made by the end of 2027.

Capital expenditure is expected to total £10-12bn each year until 2027, some £1-2bn lower than the amount spent in 2024.

To achieve this, the company said it is only making "disciplined" and "selective" investments into its so-called transition businesses, which comprise biogas, biofuels, EV charging, hydrogen, carbon capture and storage (CCS) and other renewables. As such, investment in these areas would be just $1.5–2bn per annum, over £4bn a year lower than previous guidance.

Meanwhile, annual capex into oil and gas would be increased to £8bn as it ramps up production capacity to 2.3–2.5mmboed by 2030.

Finally, Metro Bank on Wednesday said it had struck a deal to sell a portfolio of around £584m performing unsecured personal loans to an unnamed buyer. The transaction is expected to result in a gain of about £11m, the bank said, adding that it would result in an improvement in the common equity tier 1 ratio of around 81 basis points and total capital plus minimum requirement for own funds and eligible liabilities ratio of around 129bps to 23.5% from 22.2%.

“The sale of the Portfolio is in line with Metro Bank’s strategy to reposition its balance sheet and enhance risk-adjusted returns on capital. The transaction is capital accretive and creates additional lending capacity to enable Metro Bank to continue its asset rotation towards higher yielding commercial, corporate, SME lending and specialist mortgages,” Metro said.

In commodities, Oil steadied after starting the session at its lowest opening price in two months as declining US crude stockpiles helped offset a souring economic outlook.

West Texas Intermediate futures were little changed near $69 a barrel after slumping 2.5% on Tuesday on weak US consumer confidence data. Government figures Wednesday showed US oil inventories dropped 2.33 million barrels, the biggest decline in two months and a steeper drop than the 600,000-barrel decrease projected by an industry group.

Crude has slid about 5% this month as Trump’s aggressive moves on trade stoked investor anxiety at a time when traders were already concerned about lacklustre consumption in China. The diesel market is also sending signs of US demand weakness, with futures for the fuel sinking as much as 3% after inventories swelled the most since early January.

“Trump actions are hurting consumer and business confidence, which again will weaken actual consumption,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.

Supply issues have also been at the fore, including the possibility of a restart of significant pipeline flows from Iraq’s semi-autonomous Kurdistan region, with the US pushing for a resumption.

The uncertainties over tariffs have eclipsed the lift from fresh sanctions against Iranian flows, as well as expectations that OPEC+ will once again defer a plan to progressively raise output, currently slated to start in April.

“Tariffs and counter-tariffs have the potential to weigh on the oil-intensive part of the economy, which creates uncertainty over demand,” Morgan Stanley analysts including Martijn Rats said in a note. “We expect OPEC to extend its current quota beyond April, likely keeping production broadly stable.”

Trading volumes were muted with some market participants attending International Energy Week in London, a major industry gathering, where they are set to weigh the outlook for oil this year.

Government bonds have been steady today with most major 10-year yields dropping around 1 basis point and if you’re interested, most cryptocurrencies are down between 10% and 20% over the last 7 days. If big tech falls, so does crypto, so much for it being digital gold.

Now, it’s on to Nvidia earnings. While we hope for something muted, we rarely get what we want. More from us on the weekend where we will no doubt be talking about……….you’ve guessed, Nvidia’s earnings.

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Positioning on our platform:

Right now, there are a number of BUY positions across the board on our strategies.

The leveraged trackers are tracking, and looking for a market bounceback.

The long or flats have bought into the market retracement at various levels, and the active strategies have also been BUYING baskets of global equities as markets have pulled back. The larger biases are European based with the FTSE and the CAC being bought in bulk. There is some US exposure on the BUY side, but I do wonder whether this will be reduced going into the data. I guess we'll find out soon.

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One thing is for sure, expect things to be volatile. However, when the dust settles, if the markets are slightly higher, we should we well placed.

An interesting (and hopefully profitable) Evening lies ahead.

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If you're an investor looking for ways to improve your portfolio, do reach out to our team for an absolutely FREE consultation call. We use three unique approaches to assist our investors to build benchmark beating portfolios, and via our portfolio management serice, we'll ensure we build the right portfolio for you.

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If you're one of our clients, here is to a solid end to February.

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Disclaimer: The views expressed in this article are the author’s own and should not be considered in rendering any legal, business or financial advice.

Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to the corresponding past performance.

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