Anxiety Ahead Of Fed Minutes, Nvidia Earnings May Weigh On Wall Street
February 21 2024 - 9:02AM
IH Market News
The major U.S. index futures are currently pointing to a lower
open on Wednesday, with stocks likely to add to the losses posted
in the two previous session.
The downward momentum on Wall Street reflects lingering concerns
about the outlook for interest rates ahead of the release of the
minutes of the latest Federal Reserve meeting later in the day.
“The Fed kept rates unchanged for the fourth time in a row at
the January meeting and indicated it was not ready to start
cutting,” said Danni Hewson, head of financial analysis at AJ
Bell.
She added, “The meeting minutes should lift the lid on this
thinking and more likely spell out that inflation needs to come
down further before the central bank reaches for the scissors.”
Traders are also on edge ahead of the release of fourth quarter
results from Nvidia (NASDAQ:NVDA) after the close of today’s
trading.
Shares of Nvidia have skyrocketed this year amid optimism about
demand for its AI chips, but traders are wary of whether its
results will support further upside.
“While equities have run out of steam in recent days, Nvidia’s
results could be make or break time for markets,” said Hewson.
“Elevated expectations mean the chip specialist has no room for
error. It needs to smash it out of the park and show that the AI
boom still has momentum.”
Ahead of the release of its quarterly results, Nvidia is
slumping by 2.1 percent in pre-market trading after tumbling by 4.4
percent on Tuesday.
Stocks moved mostly lower during trading on Tuesday, extending
the pullback seen during last Friday’s session. The Nasdaq showed a
notable move to the downside amid weakness among tech stocks.
The major averages ended the day in negative territory but off
their lows of the session. The Nasdaq slumped 144.87 points or 0.9
percent to 15,630.78, the S&P 500 fell 30.06 points or 0.6
percent to 4,975.51 and the Dow dipped 64.19 points or 0.2 percent
to 38,563.80.
The weakness on Wall Street partly reflected ongoing anxiety
about the outlook for interest rates following last week’s
hotter-than-expectation inflation data.
CME Group’s FedWatch Tool is indicating just an 8.5 percent
chance the Federal Reserve will lower rates by a quarter point in
March, while the chances of a quarter point rate cut in early May
have fallen to 33.8 percent.
The Fed may provide additional insight into the outlook for
interest rates with the release of the minutes of its latest
monetary policy meeting on Wednesday.
Meanwhile, a strong gain by Walmart (NYSE:WMT) helped limit the
downside for the Dow, with the retail giant surging by 3.2 percent
after reporting fourth quarter results that exceeded estimates and
announcing a deal to acquire TV maker Vizio (NYSE:VZIO) for $2.3
billion.
Steel stocks showed a significant move to the downside, with the
NYSE Arca Steel Index tumbling by 1.9 percent after ending last
Friday’s trading at its best closing level in well over a
month.
Significant weakness was also visible among semiconductor
stocks, as reflected by the 1.6 percent loss posted by the
Philadelphia Semiconductor Index.
Tobacco, oil producer and transportation stocks also saw notable
weakness, moving lower along with most of the other major
sectors.
Walmart (NYSE:WMT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Walmart (NYSE:WMT)
Historical Stock Chart
From Apr 2023 to Apr 2024