Nasdaq Index, Dow Jones, S&P 500 News: Mixed Ahead of Nvidia Results; Target Plunges on Earnings Miss

U.S. Stock Futures Edge Lower Ahead of Nvidia Earnings and Fed Minutes

U.S. stock futures slipped on Wednesday as investors anticipated Nvidia’s upcoming earnings report and awaited the release of the Federal Reserve’s meeting minutes. The market is not expected to see significant impacts from the Fed minutes due at 18:00 GMT.

At 11:16 GMT, Dow futures are trading 39958.00, down 48.00 or -0.12%. S&P 500 Index futures are at 5340.00, down 5.25 or -0.10% and Nasdaq Composite futures are trading 18802.50, up 3.25 or +0.02%.

S&P 500 Sectors Performance on Tuesday

Seven out of the 11 S&P 500 sectors finished higher on Tuesday. Utilities led the gains with a 0.97% increase, followed by consumer staples and financials. Conversely, the energy sector was the biggest loser, dropping 0.51%. Despite this, all sectors remain within 10% of their 52-week highs, with the tech sector hitting a fresh record close.

Nvidia Earnings Awaited

Nvidia is expected to release its fiscal first-quarter results after the market closes on Wednesday. Analysts predict a strong performance, with earnings and revenue expected to rise by 400% and 240% year over year, respectively, according to LSEG data. Investors are keenly watching to see if Nvidia’s results will sustain the tech rally, which has pushed the Nasdaq Composite up 12% to record highs year to date.

Target Shares Fall on Earnings Miss

Target shares dropped nearly 7% in premarket trading after the retailer reported weaker-than-expected earnings and a sales decline. The company posted earnings of $2.03 per share, falling short of the $2.06 expected by analysts, while revenue met expectations at $24.53 billion. The disappointing results were attributed to reduced consumer spending on groceries and home goods.

Other Pre-Market Movers

Urban Outfitters saw a 6% increase after beating top and bottom line expectations in its latest quarter. Homebuilder Toll Brothers gained 1% following better-than-expected results and an upward revision of its full-year delivery guidance. Meanwhile, the S&P 500 and Nasdaq are coming off record-setting sessions, with the Dow also posting slight gains.

U.S. Treasury Yields Rise

U.S. Treasury yields climbed on Wednesday as investors weighed recent comments from Federal Reserve officials regarding inflation and interest rates. Fed Governor Christopher Waller emphasized the need for more data before supporting rate cuts, while Boston Fed President Susan Collins and Atlanta Fed President Raphael Bostic both stressed the importance of patience. Additional Fed remarks and the release of the latest meeting minutes are expected later in the day, alongside April’s existing home sales data.

Market Forecast

The market rally shows potential to expand beyond the tech sector, contingent on a strong conclusion to the earnings season. According to Liz Ann Sonders, chief investment strategist at Charles Schwab, continued strong earnings are crucial as last year’s market growth was driven by multiple expansions without corresponding earnings increases. Key earnings reports from companies like Analog Devices, TJX, and Raymond James Financial, along with the Fed minutes and home sales data, will be pivotal in shaping market direction.

Technical Analysis

E-mini S&P 500 Index futures are inching lower on Wednesday on some light profit-taking and position squaring ahead of the after-market Nvidia earnings report.

The benchmark futures contract did reach a record high of 5349.25 overnight, taking out the previous high at 5349.00. Overnight volume was thin on the move and it failed to follow-through to the upside.

On the downside, investors should keep an eye on a pair of minor bottoms at 5322.50 and 5305.75. Taking out the latter could lead to significant selling pressure.