US stocks rally ahead of Nvidia earnings

by Jonathan Adams
nasdaq composite

The S&P 500 gained over 0.1%, the Dow Jones Industrial Average rose nearly 0.1% or around 50 points, and the Nasdaq Composite led the way down, lower 0.3%

US stocks rallied late in the day on Wednesday as investors counted down to high-stakes earnings from AI company Nvidia and digested the release of Fed minutes which reiterated the bank’s focus on not cutting interest rates too soon.

The S&P 500 gained over 0.1%, while the Dow Jones Industrial Average rose nearly 0.1%, or around 50 points. The tech-heavy Nasdaq Composite led the way down, lower 0.3% on the heels of Tuesday’s drops.

Stocks are lagging, with the focus fixed on upcoming results from Nvidia, whose shares dropped nearly 3% on Tuesday for their worst day since October 17 as investors positioned for the release. The stock extended that loss on Wednesday, dropping over 3% heading into its earnings release. Expectations are running high for the chipmaker’s Q4 results, seen both as a barometer for the AI trade and as a potential turning point for stocks more broadly.

The market is on edge for any disappointment in the report, which is expected after the bell. Nvidia is one of a small group of megacaps behind a big chunk of recent gains for stock indexes. Mixed prospects for growth among those “Magnificent Seven” stocks have prompted hedge funds to cut holdings, as per Goldman Sachs.

In corporates, shares of Palo Alto Networks dropped more than 28% after the cybersecurity provider trimmed its annual revenue forecast, igniting concerns about a potential pullback in tech spending. In the meantime, Walgreens shares slipped as much as 3% after the pharmacy giant lost its spot on the blue-chip Dow index to Amazon.

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