The S&P 500 surrendered earlier gains on Wednesday after the Federal Reserve’s October meeting minutes reduced expectations for a December rate cut. The more cautious mood added pressure to markets ahead of key earnings from Nvidia.
By 2:28 p.m. ET (18:38 GMT), the Dow Jones Industrial Average was down 155 points, or 0.3%. The S&P 500 slipped 0.1%, while the Nasdaq Composite edged up 0.1%.
Major indexes had already fallen in the previous session. Wall Street extended a multi-day slide driven by concerns over heavy, debt-fueled AI spending and high technology valuations. The S&P 500 and Dow posted their fourth straight decline, and the Nasdaq notched its fifth drop in six sessions.
Nvidia Earnings in Focus
Investors are now watching Nvidia (NASDAQ: NVDA), a central player in the AI boom and one of the most influential stocks in the U.S. market. The company, valued at $4.41 trillion, makes up more than 7% of the S&P 500.
Nvidia is expected to report a strong quarter after the close. However, the key question is whether the company can justify its enormous valuation and offer encouraging signals on future AI spending.
Recent doubts about AI demand have weighed heavily on tech stocks. Investors worry that hype surrounding the sector may have inflated valuations too far. Nvidia has been at the center of this surge over the past three years.
Outside of tech, several retailers moved on earnings. Lowe’s (NYSE: LOW) gained after raising its full-year sales guidance and reporting stronger-than-expected third-quarter profits. TJX Companies (NYSE: TJX) also rose after boosting its annual outlook, helped by broad sourcing networks and fresh seasonal assortments that attract bargain shoppers.
In contrast, Target (NYSE: TGT) fell after reporting a larger-than-expected drop in comparable sales and cutting the upper end of its full-year earnings forecast.
Fed Minutes Pressure Rate-Cut Expectations
The Fed minutes showed policymakers held “strongly differing” views on the next steps for monetary policy. This added significant doubt to the possibility of a December rate cut.
Some members favored holding steady due to uneven progress on inflation. Others argued that rate cuts may be needed soon to support a softening labor market.
The minutes noted deep divisions over what decision would be appropriate at the December meeting.
Market expectations for a December rate cut have now dropped to about 26%, according to Investing.com’s Fed Rate Monitor Tool. This is a sharp decline from roughly 94% only a month ago.
