U.S. stock index futures were under pressure Wednesday ahead of chip designer Nvidia’s high-stakes earnings report that could potentially hinder or further fuel this year’s AI-led rally, and as investors awaited minutes from the Federal Reserve’s latest policy meeting.

Nvidia shed 1.4% in premarket trading after a more than 4% decline in the prior session ahead of the semiconductor firm’s quarterly earnings, expected after markets close on Wednesday.

The company is expected to post a more than three-fold surge in its fourth-quarter revenue on robust demand for its chips that dominate the market for artificial intelligence (AI).

Analysts have warned that Nvidia’s lofty valuation could make it vulnerable to sharp declines if it delivers anything short of a blowout report and also spark a broader selloff among other technology firms that have benefited from bets on AI.

“Nvidia results could trigger a quake of a magnitude of $200 billion, and a tsunami of tens and potentially hundreds of billion dollars across the market,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“It almost feels like Nvidia earnings could be a decisive moment in the AI rally as many expect the AI bubble to burst at some point.” The chipmaker has jumped 40.2% so far this year, compared with 6.7% and 4.1% year-to-date gains in the Philadelphia Semiconductor Index and the tech-heavy Nasdaq.

The AI-fueled rally on Wall Street this year ran into a rough patch after data last week hinted at sticky inflation and stoked concerns that the Federal Reserve could delay the start of its rate easing cycle.

U.S. stocks ended lower on Tuesday, with the S&P 500 closing below the 5,000-point level.

Minutes from the Fed’s January monetary policy meeting, due at 1400 ET (1900 GMT), will offer further clues on the timing of potential interest rate cuts. Investors will also watch out for comments from Atlanta Fed President Raphael Bostic and Fed Board Governor Michelle Bowman on Wednesday.

A majority of traders are currently pricing in June as the starting point for rate easing, compared with March at the start of the year, according to the CME Group’s FedWatch tool.

At 7:00 a.m. ET, Dow e-minis were down 68 points, or 0.18%, S&P 500 e-minis were down 11.25 points, or 0.23%, and Nasdaq 100 e-minis were down 81.75 points, or 0.46%.

Adding to the declines, Palo Alto Networks slumped 23.0% in trading before the bell after the cybersecurity firm forecast third-quarter billings below Wall Street estimates, signaling cautious spending by businesses.

Shares of other cybersecurity companies such as Fortinet , Zscaler and Crowdstrike Holdings fell between 6.1% and 9.3%.

Amazon.com gained 1.2%, with the company set to join the Dow Jones Industrial Average effective next week, replacing Walgreens Boots Alliance. Shares of Walgreens slipped 2.9%.

Renewable energy firm SolarEdge Technologies dropped 15.9% after it projected first-quarter revenue below analysts’ estimates.


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