Flat Wall Street as Investors Eye Nvidia’s Results and Fed's Rate Decisions

Wall Street remained mostly flat on Wednesday as investors awaited Nvidia's quarterly results and the Federal Reserve's policy meeting minutes. Nvidia has seen a 92% surge in shares this year, driving hopes for continued gains in AI-related stocks. Analysts anticipate market volatility based on the outcomes.

Wall Street's main indexes were mostly flat on Wednesday as investors kept to the sidelines ahead of AI chip leader Nvidia's quarterly results and the Federal Reserve's policy meeting minutes later in the day.

All eyes will be on whether semiconductor bellwether Nvidia's first-quarter results, due after market close, can meet sky-high expectations and sustain bumper gains recorded by the company's shares and other AI-related stocks. Nvidia has emerged as the third-largest U.S. company by market value following a more than 92% surge in its shares this year and an over threefold jump in 2023.

"The market is looking for a new catalyst, and maybe that will be Nvidia. We've come off of a very strong earnings season, but at current levels, you could be subject to some sort of a pullback on any disappointment," said Peter Cardillo, chief market economist at Spartan Capital Securities. The company's shares lost 0.6%, reversing premarket gains.

Wall Street's recent bull run has carried all three major indexes to record highs this month, driven by a strong earnings season as well as renewed hopes for interest-rate cuts and a so-called soft landing for the U.S. economy. The Nasdaq briefly touched a fresh record high after markets opened, before retreating. The tech-heavy index and the benchmark S&P 500 both closed at all-time highs on Tuesday.

Analysts polled by Reuters see the S&P 500 closing the year near current levels at 5,302, but warned the index's strong run means it is at risk of a correction in coming months. Investors are also keenly awaiting minutes from the U.S. central bank's latest policy meeting, due at 2 p.m. ET, for more clarity on the timing of a rate cut. Several policymakers have reiterated the need to wait for more signs of easing inflation before cutting rates.

"The Fed's data-dependent over the next two months or so but I do see a little bit of a shift in terms of perhaps members warming up to a rate cut possibly in the fourth quarter or the very latter part of the third quarter," Cardillo said. Traders see near 68% odds of the Fed cutting rates in September by at least 25 basis points, according to CME's FedWatch Tool.

At 10:02 a.m. ET, the Dow Jones Industrial Average was down 27.67 points, or 0.07%, at 39,845.32, the S&P 500 was down 0.82 points, or 0.02%, at 5,320.59, and the Nasdaq Composite was up 11.95 points, or 0.07%, at 16,844.57. Retailer Target dropped 8.6% on weak quarterly results and second-quarter forecasts for profit and comparable sales that were below expectations.

Chipmaker Analog Devices jumped 7.6% after forecasting third-quarter revenue above expectations, while U.S.-listed shares of PDD Holdings soared 3.6% as the e-commerce platform operator beat first-quarter revenue estimates. Analog's gains helped lift the S&P 500's information technology sector 0.3%, while the energy sector led sectoral declines.

Declining issues outnumbered advancers for a 1.69-to-1 ratio on the NYSE and a 1.08-to-1 ratio on the Nasdaq. The S&P index recorded 34 new 52-week highs and five new lows, while the Nasdaq recorded 53 new highs and 56 new lows.