(Reuters) -U.S. stock index futures were flat on Wednesday, as investors stepped aside in anticipation of AI leader Nvidia's earnings release that will test Wall Street's broader technology-led rally.

The chip major was at the forefront of the market recovery after April's lows, crossing the $4-trillion market capitalization mark in July to become the world's largest company as investors continued to bet on the global demand for artificial-intelligence infrastructure.

The company's results come at a time when traders have been worried the tech sector - that makes up nearly 50% of the S&P 500 - might be overvalued. Valuations of the benchmark index are well above long-term averages, according to data compiled by LSEG.

The concerns weighed on the tech sector last week after OpenAI CEO Sam Altman spoke of a potential bubble and a study from the Massachusetts Institute of Technology showed that AI tools were only a boost to individual productivity, and not corporate earnings.

Nvidia's shares edged up 0.5% in premarket trading, ahead of its earnings, which are expected after markets close. Options traders are pricing in about a $260-billion swing in the chipmaker's market value after the results.

How the company's significant China business fared during the Sino-U.S. trade war earlier this year will be closely watched along with how a recent revenue-sharing deal with the U.S. government will impact forecasts.

"In the same way Apple symbolized the smartphone era, Nvidia now defines the AI era. The stock has become the heartbeat of the market," said Josh Gilbert, market analyst at eToro.

"Regardless of whether you own Nvidia shares or not, its result will impact your portfolio in some way."

At 05:26 a.m. ET, Dow E-minis rose 25 points, or 0.05%, S&P 500 E-minis were up 2.5 points, or 0.04%, and Nasdaq 100 E-minis gained 6 points, or 0.03%.

Microsoft and Meta, top customers of the chip leader, were broadly subdued, as were semiconductor stocks Broadcom and Advanced Micro Devices.

Markets were also stabilizing following an initial decline on Tuesday, after U.S. President Donald Trump attempted to fire Federal Reserve governor Lisa Cook.

The move is likely to face legal challenges, but if successful, it could allow Trump to nominate a dovish-leaning official to the central bank board and worry investors concerned about the U.S. Federal Reserve's independence.

Investors are pricing in a 25-basis-point interest-rate cut in September, according to data compiled by LSEG, and most big brokerages also lean in that direction.

Richmond Fed President Thomas Barkin's comments will be scrutinized later in the day for his perspective on the monetary policy outlook.

MongoDB jumped 29.8% after the software-maker raised its annual profit forecast.

Cracker Barrel gained 6.5% after the restaurant chain said it would stick with its decades-old logo as plans for a new one faced social media backlash.

U.S.-listed shares of Canada Goose rose 8.6% after a report said controlling shareholder Bain Capital had received bids to take the luxury goods maker private.

Quarterly reports from retailers including Abercrombie & Fitch and Kohl's are also due on the day.