Wall St drops, cautious of Nvidia results, crucial data
Wall Street’s main indexes are lower, weighed down by tech-related stocks, as caution prevailed ahead of a highly anticipated earnings report from Nvidia and crucial economic data expected later in the week.
The benchmark S&P 500 and the Nasdaq dropped for the second straight day on Tuesday, after last week’s rally, as investors sold tech-related stocks and shifted their focus to the upcoming earnings report from AI chip firm Nvidia.
Nvidia’s shares, which led a recent bull-market rally, were down marginally ahead of the company’s results on Wednesday, where it is likely to report quarterly revenue that more than doubled and even a slight miss could hurt shares.
“I don’t think Nvidia will disappoint in this quarter. There may be some delays in the roll-out of the latest product, but they don’t have a problem with demand for their products,” Art Hogan, chief market strategist at B Riley Wealth, said.
Other chip stocks such as Broadcom fell 0.8 per cent, while Micron lost 1.3 per cent, sending the Philadelphia SE Semiconductor index down 0.5 per cent.
In early trading on Tuesday, the Dow Jones Industrial Average was down 18.23 points, or 0.04 per cent, at 41,222.29, the S&P 500 was down 4.72 points, or 0.08 per cent, at 5,612.12, and the Nasdaq Composite was down 52.09 points, or 0.29 per cent, at 17,673.67.
Tech stocks were down 0.2 per cent and among the biggest sectoral decliners, while Amazon.com fell 1.4 per cent and weighed on consumer discretionary shares.
The blue-chip Dow closed at a record high in the previous session, for the first time in more than a month, on optimism about lower borrowing costs starting next month following US Federal Reserve Chair Jerome Powell’s endorsement last week.
Traders are now betting on either a 25-basis point or a 50-basis point interest rate cut in September. Odds of the former stand at a higher 71.5 per cent, while those of a 50-bps cut are at 28.5 per cent, according to CME Group’s Fed Watch tool.
Analysts say the next major catalyst will most likely be the July Personal Consumption Expenditure data due on Friday.
Meanwhile, UBS Global Wealth Management raised the odds of a US recession to 25 per cent from 20 per cent, citing revised estimates of job growth and the recent July labour report that showed softness in the factors determining workers’ income.
Paramount Global slid 5.8 per cent after media veteran Edgar Bronfman Jr withdrew from the race for the company, clearing the way for Skydance Media to take control of Shari Redstone’s media empire.
Tesla extended declines from the previous session and fell 1.2 per cent after Canada said it will impose a 100 per cent tariff on the import of Chinese EVs. The duties apply to all EVs shipped from China, which would include those made by Tesla.
Super Micro Computer lost 4.8 per cent after short seller Hindenburg Research said it had a short position in the server maker.
Declining issues outnumbered advancers for a 2.37-to-1 ratio on the NYSE and a 2.50-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 19 new highs and 22 new lows.
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