U.S. Stocks Seeing Further Downside As Fed Minutes, Nvidia Earnings Loom

Following the pullback seen over the two previous sessions, stocks are seeing further downside during trading on Wednesday. The major averages have all fallen into negative territory, with the tech-heavy Nasdaq once again leading the way lower.

Currently, the Nasdaq is just off its lows of the session, down 103.15 points or 0.7 percent at 15,527.63. The S&P 500 is down 13.86 points or 0.3 percent at 4,961.65 and the Dow is down 93.90 points or 0.2 percent at 38,469.90.

Concerns about the outlook for interest rates continue to weigh on Wall Street ahead of the release of the minutes of the latest Federal Reserve meeting later in the day.

“The Fed kept rates unchanged for the fourth time in a row at the January meeting and indicated it was not ready to start cutting,” said Danni Hewson, head of financial analysis at AJ Bell.

She added, “The meeting minutes should lift the lid on this thinking and more likely spell out that inflation needs to come down further before the central bank reaches for the scissors.”

Traders are also on edge ahead of the release of fourth quarter results from Nvidia (NVDA) after the close of today’s trading.

Shares of Nvidia have skyrocketed this year amid optimism about demand for its AI chips, but traders are wary of whether its results will support further upside.

“While equities have run out of steam in recent days, Nvidia’s results could be make or break time for markets,” said Hewson. “Elevated expectations mean the chip specialist has no room for error. It needs to smash it out of the park and show that the AI boom still has momentum.”

Ahead of the release of its quarterly results, Nvidia is slumping by 2.0 percent after tumbling by 4.4 percent on Tuesday.

Sector News

Networking stocks are seeing substantial weakness on the day, resulting in a 3.1 percent nosedive by the NYSE Arca Networking Index. The index has tumbled to its lowest intraday level in over two months.

Palto Alto Networks (PANW) are has led the sector lower, with the cybersecurity company plummeting by 26.3 percent after reporting better than expected fiscal second quarter results but lowering its forecast for full-year revenue growth.

Significant weakness is also visible among software stocks, as reflected by the 1.8 percent loss being posted by the Dow Jones U.S. Software Index. With the drop, the index has fallen to a one-month intraday low.

Gold stocks are also seeing considerable weakness amid a modest decrease by the price of the precious metal, while computer hardware and semiconductor stocks have also moved to the downside.

Meanwhile, energy stocks have moved notably higher amid a rebound by the price of crude oil, driving the Philadelphia Oil Service Index and the NYSE Arca Oil Index up by 1.6 percent and 1.4 percent, respectively.

Housing stocks are also turning in a strong performance on the day following upbeat quarterly results from homebuilder Toll Brothers (TOL).

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index jumped by 1.0 percent.

The major European markets are also mixed on the day. While the U.K.’s FTSE 100 Index has slid by 0.8 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.3 percent.

In the bond market, treasuries have shown a lack of direction ahead of the release of the Fed minutes. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.279 percent.