Nasdaq leads the fall: Wall Street’s major indexes closed lower on Wednesday, with the Nasdaq leading the way in losses, as investors focused on Nvidia’s upcoming earnings report. The performance of Nvidia and other technology stocks, which have fueled the recent bull market rally, is under scrutiny to determine whether the trend can continue. The Dow Jones Industrial Average and S&P 500 have seen fluctuating gains and losses this week. The Dow remains near an all-time high, while the S&P 500 is just 1 percent away from its all-time peak. The market awaits Nvidia’s results, which will be announced after the close of trading.
Nvidia shares in constant flux
Nvidia shares fell 2.5 percent and traders are bracing for a potential swing of around 9.8 percent in the company’s share price on Thursday, according to ORATS data. Any disappointing results from Nvidia could impact other major tech stocks and semiconductor companies that have been instrumental in the 2024 market rally, driven by expectations that AI integration will boost earnings. Sam Stovall, chief investment strategist at CFRA Research, noted: “Investors are eager for Nvidia’s report due to high expectations. The results will influence Nvidia stock, the tech sector and the broader market.” Other semiconductor stocks including Broadcom and Advanced Micro Devices also faced declines, with the Philadelphia SE Semiconductor Index falling 1.9 percent. Growth stocks across the board were in the red, with Meta, Microsoft and Alphabet posting losses of 0.7 percent, 1.1 percent and 1.3 percent, respectively. As of 11:49 a.m. ET, the Dow was down 137.89 points (0.33 percent) to 41,112.61, the S&P 500 was down 35.66 points (0.63 percent) to 5,590.14, and the Nasdaq Composite was down 214.22 points (1.21 percent) to 17,540.60. Among S&P 500 sectors, technology stocks led the declines with a 1.5 percent drop, though bank stocks saw gains of more than 1 percent, with Wells Fargo and Bank of America each gaining more than 1 percent.
Rate cut expectations rise
Optimism over a possible rate cut by the US Federal Reserve in September continued to weigh on the market. Following recent comments from Federal Reserve Chairman Jerome Powell supporting policy adjustments, market expectations for a 25 basis point rate cut stand at 63.5%, while a 50 basis point reduction has a 36.5% probability, according to CME Group’s FedWatch tool. The July Personal Consumption Expenditures (PCE) report, due out on Friday, is expected to provide further insight into future Fed rate adjustments. Super Micro Computer fell 24.8% after announcing a delay in filing its annual report for the fiscal year ending June 30, coinciding with Hindenburg Research disclosing a short position in the company. In particular, Warren Buffett’s Berkshire Hathaway saw its market value exceed $1 trillion, with Class B shares up 0.8%. On the New York Stock Exchange, falling stocks outnumbered rising stocks in a ratio of 1.47 to 1, and on the Nasdaq, the ratio was 2.00 to 1. The S&P index recorded 73 new 52-week highs and one new low, while the Nasdaq recorded 63 new highs and 68 new lows.
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