Nvidia, Wall Street’s third-largest company by market capitalization, is scheduled to report earnings after the closing bell on Wednesday, which is likely to give a big boost to the market, leaving the question whether the big rally in AI stocks can be sustained. It will be tested.
Nvidia options are expected to move 8.7% in either direction through Friday, or $200 billion in market capitalization, according to data from options analysis firm Trade Alert. The company’s stock rose 0.64% on Tuesday and is up about 93% year-to-date after surging nearly 240% in 2023.
Investors were also keeping an eye on the minutes of the Fed’s latest policy meeting, due to be released on Wednesday, after several Fed officials reinforced their position on Tuesday that the central bank would do best to wait patiently before starting to cut interest rates.
“Investors are kind of sitting tight today because there are two big releases coming out tomorrow, the Fed minutes and Nvidia earnings, so I don’t think people want to make big bets ahead of that,” said Sam Stovall, chief investment strategist at CFRA Research in New York. He said the Fed “is still very data-driven, so the Fed is going to do what the data tells them to do and that’s pretty much it, but Wall Street, including us, is going to continue to predict that the Fed will start cutting rates in September,” according to CME’s FedWatch tool. The market is currently pricing in a 64.8% chance of at least a 25-basis-point cut at the central bank’s September meeting. The Dow Jones Industrial Average rose 66.22 points, or 0.17 percent, to 39,872.99, the S&P 500 added 13.28 points, or 0.25 percent, to 5,321.41 and the Nasdaq Composite added 37.75 points, or 0.22 percent, to 16,832.62.
The Nasdaq broke a record for the fourth time in the last six sessions, and the S&P broke a record for the first time since May 15th.
The S&P 500 traded in a range of approximately 27 points during the session.
The retailer fell 0.36% as a flurry of quarterly reports from the group marked the end of earnings season. Shares of home improvement company Lowe’s closed lower after the company warned of pressure on its operating margins this quarter.
Auto parts retailer AutoZone fell 3.53% due to poor sales in the third quarter.
Department store operator Macy’s Inc.’s shares rose 5.13% after the company raised its full-year profit outlook despite a bigger-than-expected drop in first-quarter sales.
JPMorgan Chase & Co. rose 2.01%, reversing some of Monday’s 4.5% decline and fueling gains in the S&P 500 Bank Index.
International Business Machines rose 2.09% on plans to release a series of artificial intelligence models as open source software to help Saudi Arabia train its AI systems in Arabic.
Declining issues outnumbered advancing issues on the NYSE by a 1.07-to-1 ratio, while on the Nasdaq, they outnumbered advancing issues by a 1.35-to-1 ratio.
The S&P 500 posted 54 new 52-week highs and six new lows, while the Nasdaq posted 133 new highs and 111 new lows.
Trading volume on U.S. exchanges was 11.39 billion shares, with an average of 11.87 billion shares over the past 20 trading days.
