Nasdaq, S&P fall as Nvidia slips before results; Target sinks after profit shortfall
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Wall Street’s major equity averages lost ground Wednesday, with market behemoth Nvidia (NVDA) lower ahead of the AI chipmaker’s quarterly results, while Target’s (TGT) share-price plunge dented other consumer stocks.
The S&P 500 (SP500) -0.6%, the Nasdaq Composite (COMP:IND) -0.8%, and the Dow (DJI) was -0.2%.
Each index sports Nvidia (NVDA) and broad AI-growth hopes have been cast upon the tech heavyweight valued at ~$3.6T. Its fiscal Q3 report is due after Wednesday’s market close. Among those watching are investors in more than 520 exchange-traded funds that hold Nvidia (NVDA) shares. The stock (NVDA) was down -1.5% before the report.
The top-line of the world’s largest publicly listed company is expected to surge nearly 83% Y/Y to +$33B, according to Seeking Alpha estimates. “NVDA is flashing in our buyer’s frenzy indicator again. This is tactical, but suggests upside expectations are extraordinarily high/priced in. Coincidentally SMCI flashed a sellers frenzy last week,” Renaissance Macro Research said on X (formerly Twitter).
Nvidia (NVDA) shares have charged up +193% this year, rebounding from a drop following its Q2 results, when revenue outperformance was the smallest relative to expectations in six quarters, Deutsche Bank’s Jim Reid said.
The Information Technology (XLK) sector on the S&P 500 (SP500) -1.2%, among eight other sectors that were lower, including Consumer Discretionary (XLY) and Consumer Staples (XLP).
Consumer shares broadly fell, with Target (TGT) -21% after the company slashed its annual profit guidance. Target’s earnings of $1.85 per share was short of the $2.30 consensus and lower than $2.10 a year ago. Walmart (WMT) and Costco (COST) were among other retailers whose shares drifted downward.
Turning to the fixed-income markets, Treasury yields were mixed ahead of a $16B 20-year bond auction. The benchmark 10-year yield (US10Y) was down 1 basis point to 4.40%, while the shorter-end, more rate-sensitive 2-year yield (US2Y) was up 1 basis point at 4.30%.
For more, see how Treasury yields have done across the curve on the Seeking Alpha bond page.
In Monday’s trade, the S&P 500 (SP500) and the Nasdaq (COMP:IND) finished higher as investors looked past escalating tensions in the ongoing war between Russia and Ukraine.