Traders work on the New York Stock Exchange (NYSE) floor on November 12, 2024 in New York City.
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Stocks dipped on Wednesday as Nvidia slumped 2% ahead of its market moving earnings report, and Wall Street assessed disappointing results from Target.
The Dow Jones Industrial Average dropped 158 points, or 0.4%. The S&P 500 declined 0.8%, and the Nasdaq Composite lost 1.2%.
“Like most investors, we’ll be closely watching NVIDIA’s earnings report today for any clues on how AI spending is coming in,” wrote Wolfe Research’s Chris Senyek in a Wednesday note. “We see any negative news flow or disappointing spending trends as one of the key risks that could delay or even reverse a melt-up into year end.”
All eyes are on AI darling Nvidia. The results could hold more significance than some key economic reports, given the chipmaker’s $3.6 trillion market capitalization, and set the tone for the market for the rest of the week. Investors will search for details on demand for its Blackwell AI chips, which CEO Jensen Huang last month characterized as “insane.”
Investors have eyed the report as a potential catalyst to reaccelerate the market for the rest of the year, following a fade in the big post-election rally that boosted the major benchmarks to new highs. Stocks struggled last week as Federal Reserve Chair Jerome Powell signaled that the central bank isn’t in a hurry to cut rates. Mounting geopolitical tensions between Russia and Ukraine also spooked markets Tuesday.
In other news, retailer Target slumped 20% after posting its biggest earnings miss in two years and cutting its full-year guidance due to softening discretionary demand and cost pressures. Citi downgraded the retailer to neutral, citing share loss risks.
The disappointment pressured other key retail stocks, with the SPDR S&P Retail ETF last down 1.5%. Costco and Walmart were down marginally, while discount retailers Dollar Tree, Dollar General and Five Below declined more than 3% each. Home Depot dipped 1%.
Comcast shares rose slightly as the media company announced plans to a spin off its cable networks, including MSNBC and CNBC. The separation is expected to take roughly a year. Comcast first hinted at a potential split during its October earnings call.
Investors will also listen for commentary from Federal Reserve Governors Lisa Cook and Michelle Bowman, as well as Boston Fed President Susan Collins.
— Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.