- Dow Jones down 75 points
- S&P 500 down 1 3points
- Fed signals caution
4:10pm: Stocks rally ahead of Nvidia earnings
US stocks started a comeback on Wednesday afternoon as investors awaited pivotal earnings from tech giant Nvidia and analyzed Federal Reserve minutes affirming the central bank's cautious stance on interest rate cuts.
The S&P 500 and the Dow Jones Industrial Average each edged up over 0.1% to finish at 4,982 and 38,612 points respectively, while the Nasdaq Composite dipped 0.3% to 15,581 following Tuesday's declines.
Nvidia, amid high expectations for its fourth-quarter results, experienced a sharp decline, intensifying anticipation for its earnings report. Any deviation from anticipated outcomes could significantly impact broader market sentiment.
Additionally, Palo Alto Networks shares plummeted over 28% after slashing its revenue forecast, raising concerns about tech spending, while Walgreens shares dipped 3% after being ousted from the Dow index by Amazon.
2:15pm: Fed minutes strike cautious tone
Federal Reserve officials have indicated that interest rates may have reached their peak, signaling a potential shift away from further rate hikes in the near future.
In the latest meeting minutes, Fed top brass acknowledged the risks associated with cutting rates too quickly, but most officials emphasize the need for additional progress toward achieving the targeted 2% inflation rate before considering rate cuts.
The Fed remains vigilant regarding inflation risks, with some officials cautioning against overly restrictive policies that could pose downside risks to economic growth. Additionally, there are concerns among some officials that progress toward achieving inflation targets may stall, suggesting a cautious approach to monetary policy.
Overall, the prevailing sentiment suggests a potential trend towards maintaining interest rates at higher levels for a prolonged period.
The Nasdaq was down 0.7% in the wake of the minutes, while the Dow had lost 0.2% and the S&P 500 was down 0.1%.
12:37pm: Indexes called lower as market awaits Nvidia earnings
The S&P 500 Index is currently down 15 points at 4,960 as Nvidia’s after-hours earnings call approaches.
Nasdaq-listed Nvidia was leading the megacap losers with 3.5% in losses chalked up as nervous traders await the results.
But it's Palo Alto Networks Inc facing the worst performance among the Nasdaq 100, with a quarter ripped from its share price after a worrying revenue downgrade.
The Dow Jones Industrial Average (DJIA) was down 91 points to 38,472.
Walgreens Boots Alliance Inc (NASDAQ:WBA, ETR:W8A) was a big loser, dipping 1.75% after being replaced by Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ) in the DJIA.
9.43am: US markets open lower as Wall Street holds breath for Nvidia results
US markets have opened lower with the Dow Jones down by 160 points at 38,400, while the S&P opened down 15 points at around 4,960.
Chipmaker and Wall Street favourite Nvidia is also trading around 1% lower ahead of its trading update after the markets close tonight.
Nvidia is not only the US market's most traded stock, but it's share price gains this year have been greater than the next two best performers, Microsoft and Meta, combined.
XTB analysts said: " Since Nvidia is so important for the direction of overall stock markets, the outcome of this evening’s report could be decisive in where stocks go next.
"Will it see more competition, and could this eat away at revenues in the future? If yes, then we could see a lot of volatility for markets in the coming days. But, if Nvidia signals that the future is rosy, then we could expect another leg higher in the recent rally."
Everyone's holding their breath today pic.twitter.com/SdhKGreyQw
— Morning Brew ☕️ (@MorningBrew) February 21, 2024
8.05am: US markets to open lower as investors await Nvidia earnings
US markets are set to open lower on Wednesday, with the Dow Jones down around 75 points at around 38,500 points and the S&P 500 around 30 points lower at 4,975.
However, the key focus for Wall Street investors will be how star-child Nvidia performs, with its results scheduled to be released at 21:20GMT/16:20EST.
Yesterday, the chipmaker became the US's most traded stock, overtaking Tesla.
However, some pre-earnings anxiety saw it trade around 4% lower, before suffering a further 2% drop in the aftermarket.
PRIMER: Nvidia (NVDA) scheduled to report Q4 FY24 earnings at 21:20GMT/16:20EST; conference call at 22:00GMT/17:00EST ???????? pic.twitter.com/0axQm7SpMM
— Newsquawk (@Newsquawk) February 21, 2024