Stocks Slide Ahead of Market-Moving Events

Traders are braced for Nvidia earnings, Powell speech
By Newser Editors and Wire Services
Posted Aug 22, 2023 3:55 PM CDT
Stocks Slide Ahead of Market-Moving Events
Storm clouds form above the New York Stock Exchange building.   (AP Photo/J. David Ake)

Wall Street ticked lower Tuesday ahead of two potentially market-shaking events later in the week. The S&P 500 slipped 12.22, or 0.3%, to 4,387.55 to give back some of its rare August gain from a day before, which was powered by Big Tech stocks. The Dow Jones Industrial Average fell 174.86 points, or 0.5%, to 34,288.83, and the Nasdaq composite edged up by 8.28, or 0.1%, to 13,505.87. Stocks have struggled this month as yields have shot upward in the bond market, which cranks up the pressure on other investments. The yield on the 10-year Treasury eased a bit Tuesday, a day after reaching its highest level since 2007.

Nvidia, one of Wall Street's most influential stocks, swung from an early gain to a loss of 2.8% ahead of its earnings report on Wednesday, one that could be pivotal for the stock market, the AP reports. The chipmaker has been at the center of Wall Street's frenzy around artificial-intelligence technology, which investors believe will create immense profits for companies. Analysts expect Nvidia to say on Wednesday that its revenue swelled by nearly $4.5 billion to $11.19 billion during the spring from a year earlier. Dick's Sporting Goods plunged 24.1% after its profit for the latest quarter fell well short of expectations. It also cut its forecast for earnings over the full year, citing "inventory shrink," an industry term for theft and other losses of goods.

Macy's fell 14.1% despite reporting stronger results for the latest quarter than Wall Street expected. It also stood by its financial forecasts for the full year, though it said economic conditions look uncertain. On the winning side of Wall Street, Lowe's gained 3.7% after reporting stronger profit for the latest quarter than analysts expected. The home improvement retailer also stood by its forecast for results over the full year, and it said it gave over $100 million in bonuses to its front-line workers.

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Fed Chair Jerome Powell is scheduled to give a highly anticipated speech Friday at an event in Jackson Hole, Wyoming, the site of several major Fed policy announcements in the past. Based on the action in markets for volatility, traders are bracing for the Jackson Hole speech to be a bigger potential deal than Nvidia's earnings report, according to Barclays strategists led by Stefano Pascale and Anshul Gupta. In recent years, everything from commodities to bonds to foreign stocks has become more vulnerable to outsized moves around Jackson Hole, the strategists say. The hope among traders is that Powell may indicate the Fed is done with hiking interest rates for this cycle and that it could begin cutting them next year. (More stock market stories.)

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