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Nvidia ( NVDA ) results due on Wednesday, last of Magnificent 7

earnings

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30-year US Treasury yield tops 5% during week

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After rebound, S&P 500 down over 5% from Feb record high

By Lewis Krauskopf

NEW YORK, May 23 (Reuters) - An earnings report from

semiconductor giant and artificial intelligence bellwether

Nvidia ( NVDA ) takes center stage for Wall Street in the coming

week, as stocks hit a speed bump of worries over federal

deficits driving up Treasury yields.

U.S. equities pulled back this week after a torrid rally, as

investors turned their attention to tax and spending legislation

poised to swell the U.S. government's $36 trillion in debt.

Long-dated U.S. Treasury yields rose amid the fiscal worries,

with the 30-year yield topping 5% and hitting its highest level

since late 2023.

Stocks were dealt another blow on Friday when U.S. President

Donald Trump targeted the European Union and Apple ( AAPL ) in

threats to ratchet up his trade war.

Focus will shift to Wednesday's quarterly results from

Nvidia ( NVDA ), one of the world's largest companies by market value

whose stock is a major influence on benchmark equity indexes.

"All eyes are going to be on Nvidia's ( NVDA ) report," said Chuck

Carlson, CEO of Horizon Investment Services. "The whole AI theme

has been a major driver of the market and Nvidia ( NVDA ) is at the

epicenter of that theme."

Nvidia ( NVDA ) will be the last of the "Magnificent Seven" megacap

tech and growth companies to report results for this period.

Their stocks have been mixed in 2025 after leading the market

higher as a group in the last two years.

Nvidia ( NVDA ) shares are down 2% this year after soaring over

1,000% from late 2022 through the end of 2024 as its AI chip

business spurred massive increases in revenue and profits.

Nvidia's ( NVDA ) first-quarter earnings likely jumped about 45% on

revenue of $43.2 billion, analysts estimated in an LSEG poll.

After big tech companies earlier in the quarter signaled

robust AI-related spending, Nvidia ( NVDA ) can deliver a strong message

about AI and how companies' spending plans are faring, said Art

Hogan, chief market strategist at B Riley Wealth.

"Nvidia ( NVDA ) can reinvigorate the enthusiasm for that theme."

Nvidia ( NVDA ), popular among smaller retail shareholders, is an

investor sentiment indicator, said Wasif Latif, chief investment

officer at Sarmaya Partners.

"Given its sheer size and attention that it is commanding,

there are going to be a lot of people looking for what happens

with the stock," Latif said.

U.S.-China relations could also be in focus with Nvidia's ( NVDA )

report. The company said last month it would take $5.5 billion

in charges after the U.S. government limited exports of its H20

artificial intelligence chip to China.

Trade developments have whipsawed the stock market this

year, especially after Trump's April 2 announcement of sweeping

tariffs on imports globally set off extreme asset price

volatility.

Since then, Trump's easing of tariffs, especially a

U.S.-China truce, has helped equities rebound. The benchmark S&P

500 index ended on Friday down 1.3% for 2025, and down

5.6% from its February record high.

Stocks slipped on Friday after

Trump

pushed for a 50% tariff on European Union goods starting

June 1 and threatened to impose a 25% tariff on Apple ( AAPL ) for any

iPhones sold, but not made, in the United States.

Trump's fiscal plans consumed investor attention for much of

the week, especially after Moody's downgraded the U.S. sovereign

credit rating due to concerns about the nation's growing debt

pile.

The U.S. House of Representatives, controlled by Trump's

Republican party, on Thursday narrowly passed a tax and spending

bill that would enact much of his agenda while adding an

estimated $3.8 trillion to the debt over the next decade. The

bill is heading to the U.S. Senate for its review.

Long-dated government bond yields have been rising globally

amid a selloff, although they pulled back toward the end of the

week. In the U.S., benchmark 10-year Treasury yields this week

hit their highest since February. Bond prices move opposite to

yields.

Higher yields can diminish the appeal of stocks as they

represent higher borrowing costs for companies and consumers,

while making fixed income assets relatively more attractive.

"The biggest concern from an investment standpoint is that

higher rates represent more competition for equities," said

Horizon's Carlson. "If rates continue to move higher, that is

going to put increasing amounts of pressure on where investors

are putting their money."