U.S. stocks dipped Wednesday morning as investors braced for Nvidia’s much-anticipated earnings report, which is expected to be a pivotal moment for the market as the year winds down.
As of 9:40 a.m. Eastern time, the S&P 500 fell 0.4%, the Dow Jones Industrial Average slipped 62 points (0.1%), and the Nasdaq composite dropped 0.5%.
Retail sector in focus: target falls, Walmart shines
Target shares plunged 19.6% after the retailer posted weaker-than-expected profit and revenue for the latest quarter. The company also issued a cautious outlook for the holiday season, projecting earnings below analysts’ estimates. This contrasted sharply with Walmart, which on Tuesday reported another quarter of strong sales and provided an optimistic forecast for holiday performance. The divergence underscores growing scrutiny on U.S. consumers, who face the dual pressures of elevated prices and high interest rates. Sustained consumer spending is critical for the economy to maintain its growth and avoid a recession.
On the upside, Williams-Sonoma surged 23.3% after surpassing profit and revenue expectations for the quarter. The retailer, which owns Pottery Barn, also revised its fiscal-year sales decline projection to a smaller drop than previously forecast.
Nvidia takes center stage
The spotlight is on Nvidia, which will release its quarterly earnings after the market closes. The semiconductor giant, valued at $3.6 trillion, has seen extraordinary demand for its chips, which power artificial intelligence technologies. Nvidia’s stock has nearly tripled in 2024, making it one of the most critical components of the S&P 500. Pressure is mounting for Nvidia to continue outpacing analysts’ already lofty expectations. The company has consistently delivered impressive results, and its earnings report is seen as the most significant financial event remaining in 2024—more impactful than even the Federal Reserve’s upcoming interest rate decision, according to Barclays Capital.
Treasury yields and broader market impact
Treasury yields edged higher on Wednesday, with the 10-year yield rising to 4.42% from 4.40% on Tuesday. The increase follows adjustments to forecasts by Wells Fargo Investment Institute, which raised its year-end outlook for Treasury yields and the S&P 500, citing expectations of faster economic growth and inflation under policies from Donald Trump’s recent presidential election victory.
Global markets: modest movements abroad
European and Asian markets exhibited restrained movement. The FTSE 100 in London gained 0.1% after October’s inflation rate hit a six-month high, according to the Office for National Statistics. Japan’s Nikkei 225 slipped 0.2%, with the Finance Ministry reporting a trade deficit for the fourth consecutive month in October.
As Wall Street awaits Nvidia’s earnings, the market remains sensitive to shifts in consumer strength, corporate performance, and macroeconomic developments.
