NEW YORK (AP) — U.S. stocks are drifting lower on Wednesday as Wall Street readies for what may be the biggest event left on its calendar this year, the earnings report from superstar stock Nvidia.
The S&P 500 was down 0.4%, as of 9:40 a.m. Eastern time. The Dow Jones Industrial Average fell 62 points, or 0.1%, while the Nasdaq composite slipped 0.5%.
Target helped drag the market lower with its tumble of 19.6% after reporting weaker profit and revenue for the latest quarter than analysts expected. The retailer also gave a forecast for profit in the upcoming holiday season that was below analysts’ estimates.
Target’s performance stood in stark contrast to rival Walmart, which reported another quarter of stellar sales Tuesday and released optimistic projections for the holiday season. Scrutiny has increased on the strength of U.S. consumers, who have been contending with high prices across the economy and still-high interest rates. If the economy is to continue to avoid a recession, they will need to keep spending.
On the winning end of Wall Street was Williams-Sonoma, which jumped 23.3% after the home retailer delivered better profit and revenue for the latest quarter than analysts expected. The parent of Pottery Barn also said it expects overall sales to fall by less this fiscal year than it had earlier forecast.
The headliner of the day, week and perhaps for the rest of the year, will arrive after trading ends for the day. That’s when Nvidia will unveil its results for the latest quarter.
The company has grown into a $3.6 trillion behemoth because of nearly insatiable demand for its chips used in artificial-intelligence technology. It’s grown so fast, with its stock up nearly tripling for the year through Tuesday, that pressure has grown for it to show it can keep leapfrogging past analysts’ already high expectations.
So far, Nvidia has hurdled such expectations with impressive results each quarter. That’s made it one of the most influential stocks in the market, whose movement can almost singlehandedly alter the S&P 500’s direction.
Trading in the options market suggests Nvidia’s upcoming profit report is the most anticipated event left in 2024, more than even the Federal Reserve’s upcoming meeting on interest rates, according to Barclays Capital.
Outside of Nvidia, financial markets are still absorbing the impacts of Donald Trump’s victory in the presidential election earlier this month.
Wells Fargo Investment Institute on Wednesday raised its forecasts for where Treasury yields will end next year, in part because of expectations that Trump’s policies will drive faster U.S. economic growth and inflation. Strategists at the institute also raised their forecast for where the S&P 500 will end next year because of that faster growth, which should translate into bigger corporate profits, along with easier regulations.