The S&P 500 reached an all-time high, but Wall Street remains cautious after Tuesday’s sell-off, which was mainly driven by small-cap and tech stocks. The focus now shifts to Nvidia Corp.’s fourth-quarter earnings report, scheduled for release after the closing bell. Investors are anxiously awaiting the report, as there is uncertainty surrounding Nvidia’s ability to meet high expectations.
In addition to Nvidia’s earnings, the market is also concerned about upcoming speeches by Federal Reserve officials and the release of the Fed minutes. These events have the potential to shed light on the future trajectory of interest rates, which is an important factor influencing investor sentiment.
On Tuesday, three key developments weighed down the market. Mixed retail earnings reports left investors unsure about the health of the consumer sector. Apprehension also mounted regarding Nvidia’s ability to meet expectations for its upcoming earnings report. Additionally, the Conference Board’s leading economic index experienced a larger-than-anticipated drop, raising concerns about future economic growth.
As a result of these factors, major averages were in negative territory. The tech-heavy Nasdaq and S&P 500 opened lower and remained below the flatline throughout the session. The Dow experienced some morning volatility but ultimately closed lower. The Russell 2000 underperformed, dropping 1.41%. Only consumer staples managed to escape the decline, led by Walmart’s positive results, while IT and consumer discretionary stocks took the biggest hits.
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust fell 0.26% to $498.20, and the Invesco QQQ ETF dropped 0.39% to $428.91. These numbers indicate a cautious start to the trading day.
Looking ahead, there are several economic data releases and events to watch. Atlanta Fed President Raphael Bostic is scheduled to give remarks at a summit, while Richmond Fed President Thomas Barkin will participate in a radio interview. Fed Governor Michelle Bowman will also make a public appearance. The Treasury will hold an auction for 20-year bonds. Additionally, the Fed is set to release the minutes from its January rate-setting meeting, which could provide clarity on the interest rate outlook.
Several companies are reporting their earnings before and after the market open. Palo Alto Network, Inc. saw a significant decline in premarket trading following the release of its earnings report, which also affected other cybersecurity companies. Other notable companies reporting earnings include Analog Devices, Inc., Canadian Natural Resources Limited, Garmin Ltd., and Wolverine World Wide, Inc.
In the commodities market, crude oil futures fell to $76.72, while the benchmark 10-year Treasury note saw a slight decline. Asian markets retreated, except for the Chinese and Hong Kong markets, which saw gains due to stimulatory measures from authorities. European stocks showed cautious optimism.
Overall, while the S&P 500 reached an all-time high, the market remains cautious due to various factors such as earnings reports, economic data releases, and the potential impact of the Federal Reserve’s actions on interest rates.
Please note that this article is for informational purposes only and does not constitute investment advice.
