Stocks dipped on Wednesday as investors scrutinized the latest earnings reports and Federal Reserve meeting minutes while awaiting quarterly figures from Nvidia. The S&P 500 slid 0.56% to end at 5,888.55, while the Nasdaq Composite fell 0.51% to settle at 19,100.94. The Dow Jones Industrial Average dropped 244.95 points, or 0.58%, closing at 42,098.70.
Shares of Okta plunged more than 16% after the identity management software company reported a better-than-expected quarter, citing macroeconomic uncertainty. Conversely, Abercrombie & Fitch climbed more than 14% following strong earnings reports, while Vail Resorts rose nearly 2% after restructuring announcements. Nvidia is set to report earnings after the close of the market.
Investors are closely watching these results as the company is a major player in the artificial intelligence chip market, which has seen no slowing in demand for its graphics processors. Nvidia shares closed marginally lower ahead of the report. “The big drivers of the economy that are kind of keeping it out of a recession and keeping corporate profits positive are consumer spending and business investment,” said Tom Hainlin, senior investment strategist at U.S. Bank.
“Nvidia’s results will indicate if businesses are accelerating their investments.”
The Federal Reserve released minutes from its May meeting, which showed a cautious monetary policy approach amid economic uncertainty and potential tradeoffs if inflation rises. Notably, the yield on the 30-year Treasury briefly reached 5% during the session. Investors were coming off a strong session on Tuesday, when the 30-stock Dow rallied more than 700 points, or about 1.8%, and the S&P 500 rose 2%, ending a four-day losing streak.
Investors brace for Nvidia results
The Nasdaq Composite advanced roughly 2.5%. Bank of America clients were net sellers of U.S. equities last week, marking the first outflows in five weeks, according to equity and quant strategist Jill Carey Hall.
Clients sold tech and health care stocks but bought energy stocks. UBS predicts limited upside for equities in 2025 due to trade deal volatility but anticipates a potential market rally resuming in 2026, with the S&P 500 reaching around 6,400 by June 2026. Honeywell has appointed Elliott Investment Management’s Marc Steinberg to its board of directors.
Steinberg will join as an independent director and audit committee member effective May 31. GameStop shares dropped 10% amid volatile trading despite initiating a bitcoin buying plan. The company began its crypto purchasing plan similar to a strategy made famous by MicroStrategy, as bitcoin hit a record high near $112,000.
Bank of America lifted its price target for Seagate Technology to $135, citing strong demand for cloud storage and advanced magnetic storage technology. Small cap stocks underperformed on Wednesday, with the Russell 2000 index slipping 0.7%, while the Dow Jones Industrial Average edged 0.2% lower. Wednesday’s market activity reflects investor caution amid mixed corporate earnings and the anticipation of Nvidia’s quarterly results.
The Federal Reserve’s cautious stance on monetary policy further emphasizes the prevailing economic uncertainty. Investors are closely monitoring developments in major sectors and corporate strategies as they seek direction for the remainder of the year.
