Wall Street’s primary indexes experienced slight declines on Wednesday, cooling off after a strong rally in the previous session driven by easing trade tensions. Investor sentiment turned cautious as market participants awaited crucial updates: earnings results from artificial intelligence powerhouse Nvidia and the minutes from the latest U.S. Federal Reserve policy meeting.
Nvidia, a significant player in the AI and semiconductor space, is projected to report a substantial 66.2% year-over-year increase in first-quarter revenue. Despite high expectations, Nvidia shares slipped slightly by 0.2% ahead of its earnings release scheduled for after market close.
Semiconductor Volatility Rises as Nvidia Earnings Loom and Sector Losses Deepen Broadly
As anticipation builds around Nvidia’s performance, options traders have positioned themselves for heightened market volatility, particularly within the semiconductor sector. Defensive options contracts have attracted attention, notably in the VanEck Semiconductor ETF, reflecting the broader uncertainty in tech-related stocks.
By mid-morning, the Dow Jones fell by 102.80 points (0.24%), the S&P 500 dropped 10.95 points (0.18%), and the Nasdaq Composite edged lower by 10.66 points (0.06%). The subdued performance followed a major upswing in the previous session, triggered by President Trump’s decision to step back from imposing aggressive tariffs on European Union imports.
Markets Slip as Investors Brace for Nvidia Earnings and Fed Minutes Amid Broader UncertaintyThe day saw broad weakness across major sectors, with ten of the eleven S&P 500 sub-sectors trading in the red. Energy and utilities led the losses. Most large-cap and growth stocks initially gained but later flattened out. Notably, Meta Platforms rose 0.5%, offering some relief amid the generally lackluster session.
Salesforce, a Dow component, dipped 0.7% ahead of its earnings announcement. The market’s retracement underscored investor caution despite recent gains, as many remain hesitant to double down without further clarity on AI growth trajectories and economic policy direction.
Fed Minutes and Mixed Earnings Keep Markets on Edge Amid Inflation Concerns
Investors are also focused on the upcoming release of the Federal Reserve’s meeting minutes, which are expected to provide insight into the central bank’s interest rate outlook. The Fed held rates steady in its last meeting, and the market is eager for hints on future moves amid persistent inflation and fiscal sustainability concerns.
Long-dated U.S. government bond yields edged higher, continuing a trend from the previous week, while global bond markets remain under pressure due to rising debt levels in major economies like the U.S. and Japan.
On the corporate earnings front, some companies delivered positive surprises. Capri Holdings, the owner of Michael Kors, saw its shares jump 4.8% after exceeding revenue expectations. Dick’s Sporting Goods also reported better-than-expected earnings, gaining 1.2%.
In contrast, cybersecurity firm Okta flagged economic uncertainty and saw its shares plummet nearly 14%, despite reaffirming its full-year outlook. Market breadth leaned negative, with declining issues significantly outnumbering advancing ones on both the NYSE and Nasdaq. Despite this, the S&P 500 and Nasdaq Composite recorded a notable number of new 52-week highs, suggesting selective investor optimism amid broader caution.
