Stocks Drop Ahead of Nvidia’s Earnings – US Market Wrap

Big tech dragged the stock market down from its all-time highs, with Wall Street waiting for Nvidia’s earnings on Wednesday to see if the chipmaker can meet the lofty expectations set by the AI boom.

While the ongoing earnings season has reaffirmed the view that Corporate America is doing well, the “Magnificent Seven” megacaps have had a mixed reporting period. Some traders decided to lock in profits ahead of the chipmaker’s earnings report, while the market also considered reports that Microsoft is developing a networking card to compete with Nvidia’s.

The bar is set high for the company at the center of the AI revolution, which has the best performance in the S&P 500 this year after more than tripling in 2023. Nvidia’s revenue is expected to be boosted by strong demand in its data center business. Susquehanna believes AI will remain strong, particularly as Meta Platforms and Tesla ramp up their graphics processing units.

Nvidia’s stock fell by more than 4% ahead of its results. The Nasdaq 100 fell nearly 1%, while the S&P 500 dropped below 5,000. An index of chipmakers fell 1.6%. Walmart surged after reporting strong earnings. Treasury 10-year yields were little changed, at 4.27%. The dollar fluctuated.