Stocks moved mostly higher on Wednesday following a tech-led sell-off as investors awaited earnings from Nvidia (NVDA) that will set the tone for the next leg of the AI trade.
The Nasdaq Composite (^IXIC) moved up 0.8%, while the S&P 500 (^GSPC) put on 0.5%. The Dow Jones Industrial Average (^DJI), which includes fewer tech names, traded broadly flat. The moves came on the heels of run of sharp losses for stocks.
Investors are bracing for Nvidia’s third-quarter earnings due after Wednesday’s close, which are expected to swing the stock up to 7% in either direction. More broadly, the chipmaking giant’s results could prove a make-or-break moment for this year’s strong S&P 500 (^GSPC) rally, which has been spurred by optimism for AI-fueled growth.
Concerns about Big Tech’s massive spending on the AI buildout have fed into multiday declines, as high-profile investors offload holdings. Unease is growing that the likes of Amazon (AMZN) are stepping up their borrowing to fund AI ambitions just as the Federal Reserve looks set to put the brakes on interest rate cuts.
Given that, Fed minutes set for release later will be put under the microscope for insight into the economy and future policy. While that meeting delivered a rate cut despite division at the Fed, traders are now evenly split on whether the central bank will ease again in December.
That view could shift on Thursday, when the market gets the September jobs report — the first major data release since the government shutdown delayed economic updates.
With fresh data still sparse, big-box retailer earnings on Wednesday could offer the clearest read on the state of US consumer spending heading into the holiday season. Target (TGT) cut its earnings outlook and flagged a weak holiday season, while Lowe’s (LOW) posted upbeat sales.
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Premarket trending tickers: Lowe’s, DoorDash, and MP Materials
Lowe’s (LOW) stock rose 4% before the bell after beating Wall Street estimates on quarterly sales. The retailer did, however, lower its full-year profit forecast amid growing economic uncertainty.
DoorDash (DASH) stock rose 3% before the bell following the news that Kroger will expand its partnerships with the online food ordering company.
MP Materials’ (MP) stock was up 4% in premarket trading on Thursday. The rare-earth company has seen some volatility over recent weeks due to export restrictions on rare earths from China. As part of the one-year trade truce, Beijing agreed to remove these restrictions; however, news has emerged that the details of that agreement have yet to be finalized between the US and China.
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