Chuck Mikolajczak
NEW YORK (Reuters) – U.S. stocks closed slightly higher on Tuesday as investors weighed the latest comments from Federal Reserve officials, looking for clues about the timing of rate cuts and the approaching quarterly earnings from Nvidia (NASDAQ:).
Nvidia, the third-largest company on Wall Street by market capitalization, will report results after the market close on Wednesday in what is likely to be a major market catalyst and test whether the outsized rally in artificial intelligence stocks can be sustained.
Nvidia’s options could rise 8.7% by Friday, or a market cap of $200 billion in either direction, according to analytics firm Trade Alert. Shares of the chipmaker were up modestly on Tuesday, up about 92% year-over-year after rising nearly 240% in 2023.
Investors are also eagerly awaiting minutes from the Fed’s latest policy meeting on Wednesday after several Fed officials on Tuesday reiterated their position that the central bank would be better off being patient before it starts cutting interest rates.
“Investors are just sitting on their hands today because there are two big things coming tomorrow: Fed minutes coupled with Nvidia earnings, so I don’t think people will want to make any big bets before then,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
He said the Fed is “still very data driven, and as a result, they’re going to do what the data tells them, and that’s pretty much it, but Wall Street will continue to predict, including ourselves, that the Fed will cut rates in September.”
Markets are now pricing in a 64.8% chance of a rate cut of at least 25 basis points at the central bank’s September meeting, according to CME’s FedWatch Tool.
The S&P 500 added 13.96 points, or 0.26%, to finish at 5,322.09, while the Nasdaq Composite added 38.51 points, or 0.23%, to 16,833.38, according to preliminary data. The Dow Jones Industrial Average rose 74.87 points, or 0.19%, to 39,881.64.
During the session, the price traded in a range of about 27 points.
Retail stocks fell as a stream of group quarterly reports signaled the end of earnings season, and shares of Lowe’s (NYSE:) closed lower after the home improvement company warned of pressure on operating margins in the current quarter.
Shares of auto parts retailer AutoZone (NYSE:) fell after falling sales in the third quarter, weighing on the S&P 500 retail index, which also lost ground on the day.
Macy’s (NYSE:) shares rose after the department store operator raised its full-year profit forecast despite reporting a larger-than-expected drop in first-quarter sales.
JPMorgan Chase (NYSE:) shares rose, reversing part of Monday’s 4.5% decline, helping the S&P 500 banking index gain.
International Business Machines (NYSE:) is moving forward with plans to release a family of artificial intelligence models as open source software and help Saudi Arabia train its artificial intelligence system in Arabic.