Stocks ended lower Tuesday as tech stocks, led by Nvidia (NVDA) slipped, one day ahead of the chipmaker's fourth-quarter earnings report.
The Dow Jones Industrial Average slipped 0.17% to 38,563, while the S&P 500 lost 0.60% to 4,975.
The tech-heavy Nasdaq fell 0.02% to 15,630 with Nvidia tumbling 4.35% to 694.
Analysts revealed a host of price target changes heading into the AI-chip maker's crucial earnings report after the close of trading Wednesday.
Meanwhile, the U.S. Federal Reserve’s latest monetary policy meeting minutes are scheduled to be released on Wednesday.
Bill Adams, chief economist for Comerica Bank said the minutes may clarify how much more “good data” the Fed’s policymakers want to see before starting to reduce interest rates.
"Chair Powell said at the press conference following the January decision that he saw a March cut as unlikely," he said, "but was uncharacteristically vague about exactly what the Fed’s preconditions for cuts are; this suggests FOMC members still disagree about the issue."
Adams said the minutes are also likely to shed light on the discussion planned for the March meeting about slowing the pace of the Fed’s balance sheet reduction.
Updated at 1:16 PM EST
Better Barclays
Barclays (BCLYF) , the U.K.-based bank listed on the New York Stock Exchange, is one of the biggest movers in mid-day trading after unveiling a sweeping set of changes and new financial targets as part of a three-year strategy update earlier today in London.
The update followed a muted full-year earnings report, which showed profits down 6% to around $8.3 billion. Barclays New York-listed shares were last seen 11.45% higher at $8.32 each, having closed 4.6% higher in London.
$BARC
— Franz (@franzvonloewe) February 20, 2024
Barclays PLC
If you bought over the last week or so, not too bad.. but just look at the history.. pic.twitter.com/00c7F3DTj2
Updated at 11:40 AM EST
A $100 billion here, a $100 billion there ...
Nvidia shares have lost more than $100 billion in value this morning, the biggest in the stock's 25 year history, as investors trim their holdings ahead of the AI chipmaker's fourth quarter earnings after the close of trading Wednesday.
The Information is also reporting that Microsoft MSFT is developing new technologies that could both boost the performance of its in-house made Maia server chip and reduce its reliance on Nvidia-made GPUs.
Related: Analysts unveil new Nvidia price targets as key earnings report looms
Updated at 10:11 AM EST
Rough start
Tech stocks are leading the declines in early trading, with big downside moves from Nvidia (NVDA) and Tesla (TSLA) pulling the Nasdaq 200 points, or 1.26% lower in the opening half hour. The S&P 500, meanwhile, was last marked 30 points, or 0.6%
$NVDA
— *Walter Bloomberg (@DeItaone) February 20, 2024
❖ NVIDIA Down Over 5%, On Track for Largest Percent Decrease Since May 2023
❖ Would be lowest close since Feb. 6, 2024, when it closed at $682.23
❖ Currently down four of the past five days
❖ Currently down three consecutive days; down 7.12% over this period
❖ Worst…
The Dow, however, was only down 26 points, or 0.07%, thanks in part to a big 5.3% surge for Walmart following its better-than-expected fourth quarter earnings prior to the opening bell
Updated at 9:14 AM EST
Don't bet on it
Market bets on a spring Fed rate cut continue to recede, with some emerging wagers that suggest the next move could actually be higher given both the stubborn nature of underly inflation pressures and the chances of an energy price spike tied to conflicts in eastern Europe and the middle east.
"If we learned anything last week, it’s that inflation is stubborn. Tuesday’s hotter-than-expected CPI sent the S&P 500 to its second-biggest down day of past three months and the pushed the 10-year T-note yield to its highest level since November," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley.
"Last week was only the S&P’s second down week since October, and with the market sitting on one of its biggest 16-week rallies of the past 25 years, stocks could be susceptible to more bouts of volatility if hot economic data leads traders to suspect the Fed will pace itself on cutting interest rates," he added.
Market-based expectations for rate cuts in May (blue) and June (orange) continue to recede pic.twitter.com/T6IACmABzZ
— Liz Ann Sonders (@LizAnnSonders) February 20, 2024
Updated at 7:42 AM EST
Every day stock gains
Walmart (WMT) shares jumped higher in early Tuesday trading after the world's biggest retail notched a record $647.7 billion in 2023 sales, unveiled a 9% dividend boost and topped Street forecasts in its fourth quarter earnings report.
Walmart shares were marked 2.1% higher in pre-market trading and set to open at $174.06 each, a move that would extend the stock's six-month gain to around 8.2%.
Related: Walmart beats earnings estimate, boosts dividend, agrees to buy Vizio for $2.3 billion
Stock Market Today
A faster-than-expected reading for January inflation, alongside data showing ongoing resilience in the labor market paired with improving strength in manufacturing, has largely erased any chance that the Federal Reserve will cut rates next month.
Traders now, in fact, are pushing the odds of the first rate cut of the year to the Fed's June meeting, suggesting sticky inflation prospects are likely to keep the central bank from committing to its prior forecast of at least three rate cuts over the whole of this year.
Related: Retail sales tumble clouds impact of inflation data
The new rate outlook has lifted Treasury bond yields as well as the dollar to multi-month highs, with benchmark 10-year notes last marked at 4.273% heading into the start of the New York trading session.
Investors will also navigate a light calendar of earnings and data this week, although blue-chip names such as Home Depot (HD) , Walmart (WMT) and Nvidia (NVDA) will all provide fourth-quarter updates over the coming days.
With around 80% of the S&P 500 reporting December-quarter earnings so far, analysts see collective profits rising 9.6% from 2022 levels to around $475.2 billion. Looking into the coming quarter, however, the growth rate slips to 5.2%, to a share-weighted total of around $460.6 billion.
On Wall Street, stocks are looking at a softer open to start the holiday-shortened week, with futures contracts tied to the S&P 500, which has gained just under 5% so far this, set for a 16 point opening-bell decline.
Futures contracts tied to the Dow Jones Industrial Average, meanwhile, are priced for a 130 point decline while those linked to the Nasdaq suggest an 85 point pullback.
Home Depot shares were a notable early mover, falling nearly 4% to $348 after the home-improvement retailer forecast weaker-than-expected full-year profit amid a pullback in consumer demand.
Related: Housing needs time to recover. Interest rates won't help.
Discover Financial Services (DFS) , meanwhile, surged 13% to $125.25 after Warren Buffett-backed Capital One disclosed its plan to buy the credit card group in an all-stock deal valued at $35 billion.
In overseas markets, Europe's regionwide Stoxx 600 was marked 0.14% lower in early Frankfurt trading while Britain's FTSE 100 edged 0.1% higher in London.
Overnight in Asia, China's central bank unveiled a bigger-than-expected cut to its 5-year prime loan rate, a key lending benchmark. But the move provided only a modest boost to domestic stocks, with the regionwide MSCI ex-Japan benchmark rising 0.32% into the close of trading.
Japan's Nikkei 225, meanwhile, was marked 0.28% lower by the end of trading in Tokyo.
Related: Veteran fund manager picks favorite stocks for 2024
