4.15pm: Investors brace for Nvidia's moment of truth
US stocks retreated from record highs by the close Wednesday as investors awaited Nvidia's pivotal earnings and analyzed minutes from the Federal Reserve's May meeting, which revealed some officials' readiness to hike rates if necessary.
The S&P 500 and Nasdaq Composite slipped around 0.3% and 0.2% respectively, while the Dow Jones Industrial Average fell roughly 0.5%.
Nvidia's upcoming earnings, expected to show substantial growth, have intensified market anticipation, especially regarding AI-related stocks.
Meanwhile, concerns about inflation were fueled by Target's disappointing quarterly results, indicating consumer hesitancy due to rising prices.
The Fed's minutes reinforced the stance that inflation might persist longer than anticipated, with some officials expressing openness to tightening policy if needed.
12.40pm: Stocks flat as Nvidia earnings approach
The Nasdaq was effectively flat at 18,732 in early afternoon trades, matching the muted performance of the Dow Jones Industrial Average and the broader S&P 500 index.
Markets are bracing for Nvidia’s post-market earnings call, with chip stocks including ON Semiconductor, AMD, Qualcomm and Microchip Technology among the strongest risers.
10.05am: Stocks open lower but flatten off
US stocks opened in the red but are now roughly flat.
The S&P 500 is up 0.01% and the Nasdaq Composite down 0.02% with the Dow Jone also just below flat.
9.25am: Two areas of interest
Adam Vettese, market analyst at eToro, says US earnings from two companies today embody two of the major current concerns for investors: inflation and AI.
"We see the former at play in US retailer Target, which slumped close to 8% in pre-market trading, after missing earnings expectations for the first time in a year and a half. The 3.7% fall in comparable sales at Target were mainly in discretionary categories, exemplifying how stubbornly high inflation has been biting into consumer’s wallets," Vesttesse says.
As for US semiconductor manufacturer Analog Devices, it popped close to 6% higher in pre-market trading thanks to quarterly revenue and earnings at the upper end of the company’s guidance, though the numbers were significantly lower than for the same quarter in 2023.
"You could interpret this as how receptive the market is to anything AI-related now, and perhaps a positive steer ahead of Nvidia’s earnings," the analyst says.
Nvidia reports after the close on Wall Street today.
"Underpinning the advance of the S&P 500 index has been expectations for the potential transformative power of AI for earnings, and the importance of Nvidia for the US stock market right now is hard to overstate, encompassing 5% of the whole S&P 500 as it does in terms of weighting. Investors wait with bated breath," he adds.
(Read the Nvidia preview here.)
7.30am: Dow and S&P heading for red open
US stocks are heading mostly lower at the open, according to futures markets.
Dow Jones futures are down 0.17% and those for the S&P 500 are 0.13% lower.
Nasdaq futures are just above flat, up 0.03%.
Some big US retailers are repotting today, with closely-watched NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) earnings coming after the closing bell.
Shares in Target Corp (NYSE:TGT) are down 7% in premarket trading after the chain's first-quarter revenue declined 3.1% and earnings missed for the first time in six quarters. EPS came in at $2.03, just below flat versus last year and also modestly below the Wall Street consensus of $2.06.
Elsewhere in retail, Lululemon Athletica Inc (NASDAQ:LULU) is down 4% premarket after the company said its chief product officer is leaving.
Most of the 'Magnificent Seven' tech giants are modestly in the red, premarket, apart from Tesla Inc (NASDAQ:TSLA), which is down 2.2%.