Three things to watch for the week ahead: Nvidia earnings; Australian CPI and retail sales; US PCE inflation

Josh Gilbert, Market Analyst at eToro, shares his three things to watch in Australia in the coming days.

Nvidia earnings

Nvidia Corp is the last Magnificent Seven stock to report on the earnings calendar this quarter, but is arguably the most anticipated. In its fourth-quarter earnings call earlier in the year, chief executive officer Jensen Huang said demand for Blackwell chips had been “amazing” and that they were seeing billions of dollars worth of sales in the first quarter. So, will that translate this week?

Since that call, Trump’s tariffs have roiled markets, and we are still unsure how the 90-day tariff pause will play out. Therefore, commentary around tariffs will be a focal point. We know that Nvidia has been hit with a US$5.5 billion charge for exporting chips to China, which will show up in its results, but as this is already known, it is unlikely to move the dial too much for investors.

Investors will want to hear how the company plans to navigate exports to China with potentially new chip variants that could offset some sales in the second half of the year. Concerns remain over a potential downturn in demand for chipmakers due to tariff-related disruption, but given strong demand from hyperscalers, this is unlikely to weigh heavily on Nvidia.

Blackwell chips are now in full production. From what we have seen from Big Tech already this quarter, billions more dollars are being allocated to AI—signalling high demand for Nvidia’s offerings. The costs from launching the new Blackwell chips dented margins last quarter and could do so again. However, commentary about improving margins in the second half, particularly through pricing power, should be a positive for investors.

With demand soaring, Nvidia looks set to deliver another strong quarter. Investors are likely to see upbeat guidance, reinforcing Nvidia’s standing as the most pivotal stock in global markets today.

Australian CPI and retail sales

Two major economic indicators are set to influence the Reserve Bank of Australia’s (RBA) next interest rate decision this week. Monthly Consumer Price Index (CPI) figures for April will be released on Wednesday, followed by April’s retail trade data on Friday.

Last week’s rate cut, which reduced the cash rate to 3.85%, was influenced by quarterly CPI data showing headline inflation steady at 2.4%—the lowest level since early 2021. Trimmed mean inflation also dropped from 3.3% to 2.9%, falling within the RBA’s 2–3% target range for the first time in more than three years.

Australia’s monthly CPI has remained flat at 2.4% for two months, and April’s figure is expected to remain steady or decline slightly to 2.3%, according to consensus estimates. If realised, this would signal a resumption of the disinflation trend despite the re-emergence of inflation concerns tied to Trump’s new tariffs.

RBA Governor Michele Bullock recently noted she “did not know at this point” whether a prolonged series of rate cuts was ahead, emphasising a cautious approach. A further CPI slowdown could help tip the balance toward additional cuts.

Retail trade figures for March showed a 0.3% month-on-month increase, up from 0.2% in February, though still under expectations. If April’s result falls below the 0.3% estimate, it could add further pressure on the RBA to cut rates again, especially as the effects of May’s rate cut and improving trade sentiment take hold.

US PCE inflation

In the United States, a key inflation reading is due this week with the release of the Federal Reserve’s preferred inflation gauge: Personal Consumption Expenditures (PCE).

The main focus will be on the pass-through effects of recent tariffs. Early signs of this appeared in April’s Consumer Price Index (CPI) and Producer Price Index (PPI) data, which may foreshadow a rise in goods prices in this week’s PCE figures.

However, while increases in tariff-exposed goods are expected, they are likely to be offset by a continued decline in services inflation. Market consensus is for PCE inflation to come in at 2.1%, with core inflation at 2.5%.

Markets currently price in a 65% chance of a rate cut in September. This would give Federal Reserve Chair Jerome Powell time to assess whether tariffs are exerting an inflationary effect. A consistent softening in PCE data will be necessary for the Fed to move forward confidently with rate cuts.