5 Things to Know Before the Market Opens Wednesday

Here are five key things investors need to know to start the trading day:

While some analysts are questioning the pace of AI adoption, the strategic maneuvering among tech titans vying for AI supremacy continues unabated. The market’s immediate focus is on Nvidia’s earnings report, released after the bell today. This report is poised to offer a crucial glimpse into the current state of the AI hardware market and Nvidia’s commanding position within it.

Here’s a breakdown of the latest developments:

• Nvidia shares have dipped over 4% this week ahead of its Q3 results, reflecting investor caution rooted in inflated expectations. However, premarket trading shows a slight rebound, up over 1%. The sustainability of this upward trend hinges on the detailed guidance provided by Nvidia later today.
• Signaling a deepening strategic alliance, Nvidia and Microsoft announced a partnership with AI startup Anthropic. Sources familiar with the deal suggest Anthropic’s valuation has surged to approximately $350 billion thanks to these investments. This partnership could challenge OpenAI’s current market dominance. The symbiotic relationship sees Microsoft leveraging Anthropic’s AI models for its Azure cloud platform, while Nvidia provides the computing infrastructure necessary for advanced AI model training and deployment.
• Microsoft also unveiled Agent 365, a product designed to monitor and manage the use of AI agents within organizations. This move underscores the growing demand for AI governance and control, as companies grapple with the security and compliance implications of widespread AI adoption.
• Google is escalating its AI arms race with the unveiling of Gemini 3, the latest iteration of its proprietary AI model. As Google attempts to regain lost ground against OpenAI’s ChatGPT, many are asking whether Gemini 3’s capabilities will prove to be enough to change the AI landscape. The enhancements to Gemini 3, including improved multi-modal understanding and reasoning, could reshape applications like search and language translation.
• In a significant commercial deal, Intuit will pay OpenAI over $100 million as part of a multi-year agreement to integrate ChatGPT into its financial products, including TurboTax. This integration could revolutionize tax preparation, offering personalized assistance and automating traditionally manual processes. It’s an example of how GenAI is being embedded in legacy applications, adding considerable value to enterprise workflows.
• The collective pullback in Nvidia and other AI stocks reverberated throughout the broader market, resulting in the S&P 500’s longest losing streak since August. This highlights the AI sector’s growing influence over overall market performance, and as it becomes a source of both investor excitement and potential volatility.

Target’s Q3 revenue fell slightly short of Wall Street’s expectations, prompting a downward revision of its full-year profit outlook. Shares reacted negatively in premarket trading. The retailer is navigating a challenging consumer landscape, with inflationary pressures impacting discretionary spending. Investors will be scrutinizing Fiddelke’s strategy for stimulating sales, especially considering the competitive price cuts from rival Walmart.

Despite the mixed results, incoming CEO Michael Fiddelke emphasized the company’s commitment to strategic investments aimed at restoring growth momentum as quickly as possible. The crucial detail, however, remains when this growth is expected to materialize.

Lowe’s also lowered its full-year profit outlook, but its stronger-than-anticipated Q3 earnings per share fueled a positive response in premarket trading. The home improvement retailer is benefiting from a resilient housing market and sustained demand for home improvement products and services. The positive earnings contrast highlights Lowe’s effective cost management and successful execution of omnichannel strategies.

The bipartisan Epstein Files Transparency Act, mandating the release of Justice Department files related to Jeffrey Epstein, has passed both houses of Congress and awaits presidential signature. The impending release of these documents has triggered a wave of public and media interest, as well as a scramble among individuals who may have connections to Epstein to manage any potential reputational damage.

Adding to the fallout, former Treasury Secretary Larry Summers announced his resignation from OpenAI’s board, following the exposure of his past communications with Epstein. This move highlights the increasing scrutiny on individuals associated with Epstein and their roles in influential organizations. Some are criticizing Summers’ involvement with both OpenAI and Epstein as a conflict of interest.

Meta emerged victorious in its antitrust battle against the Federal Trade Commission, with Judge James Boasberg ruling that the company does not currently hold a monopoly in the social media market. The judge’s decision cited the competitive presence of platforms like TikTok and YouTube.

The case centered on Meta’s acquisitions of Instagram and WhatsApp, with regulators arguing that the company should be forced to divest these assets. The court’s rejection of this argument is a major win for Meta. The case reveals the complexities of defining and regulating the rapidly evolving social media ecosystem.

CEO Mark Zuckerberg, former operating chief Sheryl Sandberg and Instagram co-founder Kevin Systrom all testified in the trial.

Netflix is diversifying beyond streaming, venturing into branded merchandise and in-person experiences. This strategic shift mirrors the approach of traditional media companies and reflects the growing popularity of Netflix’s original content.

By leveraging its popular content library, featuring titles like “KPop Demon Hunters” and “Bridgerton,” Netflix aims to create new revenue streams and forge deeper connections with its audience, expanding its brand recognition and appeal. These IRL events and merchandising deals function as additional marketing channels, further bolstering the brand’s visibility.

Netflix has forged product partnerships with Hasbro, Mattel, and Jazwares to produce merchandise based on its IPs. The company has also launched a series of short and long-term event spaces, including the Netflix House Philadelphia. This multifaceted strategy aims at creating a flywheel effect – driving consumer engagement both online and offline.

President Trump criticized ABC after a reporter questioned him about the unreleased Epstein files.