Nasdaq Index, Dow Jones, S&P 500 News: Mixed Ahead of Nvidia Results; Target Plunges on Earnings Miss

Nasdaq Index, Dow Jones, S&P 500 News: Mixed Ahead of Nvidia Results; Target Plunges on Earnings Miss

S&P 500 Sectors Performance on Tuesday

Seven out of the 11 S&P 500 sectors finished higher on Tuesday. Utilities led the gains with a 0.97% increase, followed by consumer staples and financials. Conversely, the energy sector was the biggest loser, dropping 0.51%. Despite this, all sectors remain within 10% of their 52-week highs, with the tech sector hitting a fresh record close.

Nvidia Earnings Awaited

Nvidia is expected to release its fiscal first-quarter results after the market closes on Wednesday. Analysts predict a strong performance, with earnings and revenue expected to rise by 400% and 240% year over year, respectively, according to LSEG data. Investors are keenly watching to see if Nvidia’s results will sustain the tech rally, which has pushed the Nasdaq Composite up 12% to record highs year to date.

Target Shares Fall on Earnings Miss

Target shares dropped nearly 7% in premarket trading after the retailer reported weaker-than-expected earnings and a sales decline. The company posted earnings of $2.03 per share, falling short of the $2.06 expected by analysts, while revenue met expectations at $24.53 billion. The disappointing results were attributed to reduced consumer spending on groceries and home goods.

Urban Outfitters saw a 6% increase after beating top and bottom line expectations in its latest quarter. Homebuilder Toll Brothers gained 1% following better-than-expected results and an upward revision of its full-year delivery guidance. Meanwhile, the S&P 500 and Nasdaq are coming off record-setting sessions, with the Dow also posting slight gains.

U.S. Treasury Yields Rise

U.S. Treasury yields climbed on Wednesday as investors weighed recent comments from Federal Reserve officials regarding inflation and interest rates. Fed Governor Christopher Waller emphasized the need for more data before supporting rate cuts, while Boston Fed President Susan Collins and Atlanta Fed President Raphael Bostic both stressed the importance of patience. Additional Fed remarks and the release of the latest meeting minutes are expected later in the day, alongside April’s existing home sales data.

Market Forecast

The market rally shows potential to expand beyond the tech sector, contingent on a strong conclusion to the earnings season. According to Liz Ann Sonders, chief investment strategist at Charles Schwab, continued strong earnings are crucial as last year’s market growth was driven by multiple expansions without corresponding earnings increases. Key earnings reports from companies like Analog Devices, TJX, and Raymond James Financial, along with the Fed minutes and home sales data, will be pivotal in shaping market direction.

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