Technology Stocks Lead Wall Street Lower Ahead of Nvidia Earnings
Technology stocks led Wall Street broadly lower on Tuesday as chipmaker Nvidia pulled back ahead of its highly anticipated earnings report this week. Wall Street will be closely watching its latest earnings update on Wednesday for clues about its health and the broader tech sector’s potential in 2024. Several big retailers reported their latest earnings on Tuesday, presenting a mixed bag of results. Walmart rose 3.2% after reporting stronger-than-expected results for its latest quarter and issuing sales forecasts that came in ahead of what Wall Street was expecting.
The S&P 500 fell 30.06 points, or 0.6%, to 4,975.51. The Dow Jones Industrial Average fell 64.19 points, or 0.2%, to 38,563.80. The Nasdaq composite fell 144.87 points, or 0.9%, to 15,630.78.
Technology stocks were the biggest drag on the market, with chipmakers as a particularly heavy weight. Nvidia slumped 4.4%. It’s still the S&P 500’s biggest gainer so far this year, rising about 40%.
Wall Street will be closely watching its latest earnings update for clues about its health and the broader tech sector’s potential in 2024. Home improvement retailer Home Depot was mostly unchanged after a day of unsettled trading. It beat Wall Street’s earnings forecasts but gave investors a disappointing profit forecast for the year.
The market fell last week after several pieces of economic data signaled that inflation remains stubbornly high. That stalled a rally that began in late October based on hopes that inflation would cool enough to allow the Federal Reserve to cut interest rates.
At this point, Wall Street is now looking for the first rate cut to come in June, months later than earlier anticipated. Investors have to wait until the end of February for another key update on inflation.
Investors have a relatively light week of economic news. Data on home sales will be reported on Thursday. Mortgage rates remain high, though they have been easing from their most recent peak in late October.
Several companies will report earnings this week. More than 80% of companies in the S&P 500 have reported their latest results. Analysts expect overall earnings growth of about 3.3% for the fourth quarter and are forecasting earnings growth of about 3.6% for the current quarter.
Discover Financial Services soared 12.6% after agreeing to be acquired by Capital One Financial for about $35 billion.
Bond yields fell. The yield on the 10-year Treasury slipped to 4.27% from 4.28% late Friday. The yield on the two-year Treasury fell to 4.61% from 4.65%.
Analyst comment
Positive news: Walmart reported stronger-than-expected results and issued sales forecasts ahead of expectations. Discover Financial Services soared after agreeing to be acquired by Capital One Financial for $35 billion.
Negative news: Technology stocks, particularly chipmakers like Nvidia, pulled back ahead of their earnings report. Home Depot beat earnings forecasts but gave a disappointing profit forecast for the year.
Neutral news: Several big retailers reported mixed earnings. The market fell last week due to high inflation, delaying anticipated interest rate cuts.
Market analysis: The market is currently experiencing a decline, with technology stocks and chipmakers being the main drag. Investors are closely watching the earnings updates for clues about the sector’s health and potential. Overall, the market is waiting for further updates on inflation and economic data before making any significant moves.
