Ahead of the market open, Nvidia (NASDAQ:NVDA) shares are down 3% after it released its latest quarterly results. Given the fact that it has one of the largest individual impacts on the movement of the S&P 500, here’s what I think could be in store for the index through to year-end.

Details behind the results

The move so far this morning (21 November) really interests me for several reasons. Nvidia results beat market expectations. Revenue hit $35.08bn, a solid beat from the $33.16bn forecast. Even on the bottom line, adjusted earnings per share exceeded the $0.75 expected by hitting $0.80. For the record, this was the eighth consecutive quarter of Nvidia beating Wall Street forecasts.

Despite such a strong performance, the stock fell in the immediate aftermath. I think this can be put down to the fact that the pace of growth is starting to slow. For example, year-on-year revenue growth was 94%. This might sound incredible, but let’s put things into perspective. The previous quarter revenue growth versus the 2023 comparable period was 122%. The quarter before was up 262% and the one before that 265%.

So the slowing rate of increase is one point that has made investors stop and think. Another reason for the share price reaction is investor sentiment. Even though the results were great, investors clearly were expecting something even more amazing. Put another way, the bar was set so high that people were unfortunately going to be disappointed with almost whatever was released!

Implications for the index

Nvidia shares are up 190% over the past year. Given the size of the business, it has certainly helped to contribute to the 30% gain in the S&P 500 index over the same time period.

In the short term, I think we could see the index tread water. The move following results for Nvidia will likely cause investors to pause and take a breath from the rally. Do things need to be recalibrated? Is the price-to-earnings ratio excessive? Can the business keep beating expectations in the next year? These are some likely points for consideration.

From my view, I don’t see this as the start of a major correction in the S&P 500 or Nvidia shares. But I do think that it will put the brakes on the index pushing materially higher into year-end. This ties in with the fact that some traders and investors could be looking to reduce their risk by Thanksgiving, with some choosing to sit on their hands until January.

Looking ahead to 2025, I think the S&P 500 will continue to push higher, but with other sectors being the key drivers. For example, with the new Presidency, I think US stocks like Tesla will outperform. On that basis, I’m not going to be buying Nvidia right now.