US Stocks-S&P 500, Nasdaq set for lower open after inflation data; Nvidia results awaited

Investors will closely watch Nvidia's quarterly update, viewed as a crucial test for the AI-driven rally at a time when the slightest hint of slowing growth is being punished.

Anything less than a stellar report from the chip heavyweight could rekindle doubts about the sustainability of the AI boom and set the tone for tech stocks for the rest of the week. Shares of Nvidia, set to report results after markets, were down 0.1% in premarket trading.

"This market is a tug of war between earnings and interest rates and, up to this point, earnings have been winning that battle. As long as the fundamentals remain strong, (the) market is going to hold up okay," said Buchbinder.

Bumper results could also deepen the divide between software stocks that have taken a beating this year, and semiconductors, which have capitalized heavily on the AI euphoria.