Why March 16 Could Be a Big Day for the Stock Market

The S&P 500 has soared over the past few years for various reasons -- from optimism about a lower interest rate environment to excitement about artificial intelligence (AI) stocks. But, in recent weeks, sentiment has shifted from exuberance to concern. Investors have questioned the strength of AI revenue prospects, have worried about economic growth, and just recently, turned their attention to the conflict in Iran.

All of these elements have weighed on appetite for stocks and supported volatility; the major benchmark has fluctuated between gains and losses according to the news of the moment.

In this context of investors seeking direction, March 16 could be a particularly big day for the stock market. Let's find out more.

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AI and stock market performance

Before diving in, it's key to consider the role AI has played in market performance over the past few years. Investors have raced to get in on the most promising AI stocks, companies developing and/or using AI, as this area is seen as a potential game changer. AI is making operations more efficient and has the potential to speed up and improve processes in a variety of areas, from drug discovery to manufacturing.

The technology already is delivering results -- and due to this, certain companies have seen their earnings and stock prices soar. One major example is Nvidia (NASDAQ: NVDA), the maker of the world's most sought-after graphics processing units (GPUs). These are the chips driving the AI revolution as they take on key tasks such as the training and inference of large language models. Nvidia's chips are the fastest on the market, and that's helped Nvidia rise to the position of leader.

Thanks to sales of GPUs and related products, Nvidia's earnings have climbed to record levels. For example, the company delivered a mind-boggling $215 billion in revenue last year and $120 billion in profit. The stock has soared 1,300% over the past five years, though year-to-date it's little changed, amid the general market environment I mentioned above.

Nvidia as a bellwether

Nvidia's market position, involving relationships with major AI players from OpenAI to Amazon, has helped the company gain enormous visibility about what's to come and a strong understanding of the AI market. And since AI stocks have set the tone for the stock market in recent years, the company has become a bellwether -- so we can look to Nvidia for clues about what may happen next.

And this brings me to what's taking place on March 16. Nvidia's GTC AI conference and expo begins, with a keynote by Nvidia chief Jensen Huang kicking off the action. It will unfold from 11 a.m. to 1 p.m. Pacific Time in San Jose.

Generally, Huang offers a broad range of information at GTC, highlighting Nvidia's latest accomplishments, announcing new products, and importantly, offering investors an idea of what's next for the industry. Ahead of this year's event, Nvidia said the keynote will set "the industry's direction for the year ahead."

Huang's presentation clearly will offer investors a solid picture of the AI story right now and what we might expect to unfold in the coming months and even years. It's reasonable to be optimistic about the contents of his presentation because the message over the past few years -- and as recently as last month during the company's earnings report -- has been positive. And details revealed at GTC could reinforce optimism.

Could this lead the market higher on March 16 and through the week as the conference, which includes sessions with experts and AI leaders, unfolds? If we consider Huang's speech only, the answer is yes, but it's important to keep in mind that any geopolitical or economic factors could weigh on investors' minds and put a halt to a rally.

Here's the good news, though. Nvidia and many other AI stocks still present a very positive investment case, with AI set to drive earnings growth in the years to come, and that means these stocks could deliver a win over time.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.