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Stock market today: Stocks close lower after Fed minutes, ahead of Nvidia earnings

Karen Friar and Josh Schafer
Updated

US stocks slipped from record highs on Wednesday as investors waited for AI bellwether Nvidia's (NVDA) pivotal earnings and digested minutes from the Federal Reserve's May meeting that revealed some officials were willing to hike rates if necessary.

The S&P 500 (^GSPC) slid about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) slipped around 0.2%. The blue-chip Dow Jones Industrial Average (^DJI) fell roughly 0.5%.

After the close, Nvidia reported its highly anticipated first quarter earnings, which topped Wall Street estimates. The company also announced a 10-for-one stock split set to take effect June 7 and said it plans to raise its dividend from $0.04 per share to $0.10. Its stock rose more than 2% in after-hours trading.

Investors were also greeted with the minutes from the Federal Reserve's May meeting on Wednesday. Markets took a notable leg lower as the minutes revealed "various" Fed officials mentioned a "willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate."

Read more: How does the labor market affect inflation?

LIVE COVERAGE IS OVER17 updates
  • Brian Sozzi

    Eyes on Intel after another big Nvidia quarter

    Intel (INTC) is going to have its work cut out for itself as it tries to wrestle back market share in the data center from Nvidia (NVDA).

    Nvidia's data center sales exploded 427% year over year in the first quarter!

    Here's what Intel CEO Pat Gelsinger recently told me about his company's plans.

  • Brian Sozzi

    Nvidia's guidance

    Trying to poke holes in Nvidia's (NVDA) guidance but it's hard.

    The company thinks it can grow second quarter revenue by a whopping $2 billion sequentially to $28 billion.

    Gross profit margin guidance is below the first quarter actual rate, but how can that not be viewed conservatively after another big earnings report!

  • Josh Schafer, Daniel Howley

    Nvidia rises after earnings beat, announces 10-for-1 stock split

    Nvidia (NVDA) shares rose about 4% after hours after the company reported earnings that topped Wall Street's estimates. The company also announced plans for a ten-for-one stock split to take effect on June 7.

    The company saw adjusted earnings per share (EPS) for the quarter of $6.12 on revenue of $26 billion, a jump of 461% and 261%, respectively, from a year ago.

    Analysts were expecting adjusted EPS of $5.65 on revenue of $24.69 billion, according to data from Bloomberg. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year.

    In the current quarter, Nvidia expects revenue of $26.8 billion plus or minus 2% in the coming quarter. That’s better analysts had expected.

  • Brian Sozzi

    Quick hot take on Nvidia

    Lots of concern on Nvidia's (NVDA) gross margin potentially peaking in the first fiscal quarter.

    Arguably didn't see that happen — Nvidia's non-GAAP gross profit margin hit 78.9% in the quarter, up from 76.7% in the preceding quarter.

  • Josh Schafer

    Stocks close lower ahead of Nvidia earnings

    US stocks slipped from record highs on Wednesday as investors waited for AI bellwether Nvidia's (NVDA) pivotal earnings and digested minutes from the Federal Reserve's May meeting that revealed some officials were willing to hike rates if necessary.

    The S&P 500 (^GSPC) slid about 0.3% while the Nasdaq Composite (^IXIC) slipped around 0.2% and the Dow Jones Industrial Average (^DJI) fell roughly 0.5%.

    Nvidia (NVDA) closed down less than 0.5% into its earnings release.

  • Josh Schafer

    The key numbers to watch in Nvidia's report

    The market's most anticipated release of the week is almost here.

    Nvidia (NVDA) is set to release earnings after the closing bell on Wednesday. Once again, the expectations for the AI leader are sky-high, with Wall Street looking for revenue and profits that rose more than 200% and 400%, respectively.

    Yahoo Finance's Dan Howley reports:

    Analysts expect adjusted earnings per share to total $5.65 on revenue of $24.69 billion, according to data from Bloomberg. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year.

    Nvidia stock has been on a tear over the last year, rising over 200% and closing at a record high on Tuesday. The stock has risen nearly 700% since the stock market lows in October 2022. Shares were off around 1.5% headed into the close on Wednesday.

  • Josh Schafer

    Goldman's Solmon sees 'zero' rate cuts this year

    Goldman Sachs CEO David Solomon said he doesn't expect the Federal Reserve to cut interest rates this year during an event at Boston College.

    “I still don’t see the data that’s compelling to say we’re going to cut rates here,” Solomon said at the event, according to Bloomberg.

    He added that he sees "zero" rate cuts this year.

  • Josh Schafer

    Fed minutes show officials see disinflation taking 'longer than previously thought'

    The release of the minutes from the Fed's May meeting struck a similar tone to one Fed officials have been touting in recent weeks: Inflation isn't falling as fast as initially hoped.

    Participants noted that they "continued to expect that inflation would return to 2% over the medium term. But recent data hadn't "increased" confidence, and therefore, they believed "the disinflation process would likely take longer than previously thought."

    Also in the minutes, various participants mentioned a "willingness" to tighten policy "should risks to inflation materialize in a way that such an action became appropriate."

    Markets hit their lows of the day following the release with the S&P 500 (^GSPC) falling about 0.4%.

  • Josh Schafer

    Trending tickers on Wednesday afternoon

    Target (TGT) stock dropped more than 6% as comparable sales declined more than estimated in the prior quarter. Executives pointed to inflationary pressures on consumers when explaining the decline.

    Lululemon (LULU) shares fell roughly 7%, hitting their lowest intraday level since March 2023, as the company announced the departure of chief product officer Sun Choe.

    Barnes & Noble (BNED) stock was up almost 100%, extending gains from the prior sessions. The stock is now up more than 450% in the past five days on no significant news, showing signs of a meme stock-like rally.

    Moderna (MRNA) shares rose more than 11%, rising for the eighth straight day and on track for their highest close since April 2023.

  • Josh Schafer

    Stocks quiet in lead up to Nvidia, Fed minutes

    Stocks have been in a holding pattern as investors await AI bellwether Nvidia's (NVDA) pivotal earnings and the release of minutes from the Federal Reserve's May meeting.

    The S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and the Nasdaq Composite (^IXIC) were all less than 0.1% during mid-day trade.

    In sector action, Industrials (XLI) and Technology (XLK) were leading on the day with Energy (XLE), down more than 1%, the biggest laggard on the day.

    Source: Yahoo Finance
    Source: Yahoo Finance
  • Brian Sozzi

    Buttigieg weighs in on Boeing

    If Boeing (BA) execs were looking for a pat on the back for drilling into their operations after several more high-profile incidents, they aren’t getting one from Transportation Secretary Pete Buttigieg.

    Here’s what Buttigieg told me moments ago on Yahoo Finance about Boeing:

    “The good news is that there has been a lot of engagement. They have taken a number of steps in response to the pressure that the FAA is putting on them. But, there is still a long way to go,” Buttigieg said.

    He added, “At the end of the day, it’s all about the results. They are saying the right things. They are taking encouraging steps. But we need to make sure that we see it on the shop floor, that we see it in terms of the quality of the product that rolls off the line. That’s why the FAA is taking this extraordinary step of not permitting them to increase their production rate until they have shown beyond a doubt that they can safely address those quality issues and increase that production in a way that is consistent with the quality that everybody expects from such an important company and producer in the United States.”

    You can watch our interview with Transportation Secretary Buttigieg below.

  • Josh Schafer

    Lululemon drops almost 7% after product chief exits

    Lululemon (LULU) shares fell nearly 7%, hitting their lowest intraday level since March 2023, as the company announced the departure of chief product officer Sun Choe.

    Wedbush analyst Tom Nikic reasoned Choe was an "instrumental part in LULU's success over the past 7+ years," and the initial decline in shares made sense.

    The move puts shares of LULU down about 40% this year as sentiment has soured around the stock amid competition from companies like Alo and Vuori. Nikic argues that the move over the course of the year has been "overdone."

    "Hypergrowth internationally can mitigate slower growth at home, while reduced discounting online could be a sign that U.S. trends are starting to stabilize," Nikic wrote in a note to clients on Wednesday morning.

    The company's latest earnings release is slated for Wednesday, June 5.

  • Alexandra Canal

    BuzzFeed shares soar after Vivek Ramaswamy discloses 7.7% stake

    BuzzFeed (BZFD) stock surged as much as 83% in early trading on Wednesday after former Republican presidential candidate Vivek Ramaswamy disclosed a 7.7% stake in the embattled media giant and indicated he would push for changes at the company.

    According to an SEC filing, Ramaswamy believes BuzzFeed shares "are undervalued and represent an attractive investment opportunity." He intends to engage the board in discussion over "numerous operational and strategic opportunities to maximize shareholder value, including a shift in the company's strategy."

    BuzzFeed, once seen as a crown jewel in the digital media space, struggled after going public via a special purpose acquisition company, or SPAC, in 2021. The stock has fallen more than 90% since that time.

    FILE - Vivek Ramaswamy speaks during the Conservative Political Action Conference, CPAC 2024, at National Harbor, in Oxon Hill, Md., Saturday, Feb. 24, 2024. Ramaswamy had purchased a 7.7% stake in Buzzfeed, the Pulitzer Prize winning digital media outlet that went into restructuring last year. Shares skyrocketed more than 50% before the market open on Wednesday, May 22. (AP Photo/Alex Brandon, File)
    Vivek Ramaswamy speaks during CPAC 2024 in Oxon Hill, Md., Feb. 24, 2024. (AP Photo/Alex Brandon, File) (ASSOCIATED PRESS)

    The disclosure of the stake raises more questions about BuzzFeed's strategic direction. Ramaswamy, a 38-year-old biotech entrepreneur, endorsed Donald Trump after dropping out of the presidential race in January following the Iowa caucuses. He has built a reputation as an "anti-woke" activist opposed to corporate involvement in social and environmental causes.

    In the past year, BuzzFeed has undergone major changes in an attempt to reach profitability.

    BuzzFeed announced plans to shutter its news division and slash 15% of staffers, or about 180 employees, in April 2023. Earlier this year, the company said it would cut an additional 16% of its workforce "to reduce centralized costs and to allow the company to become more agile, sustainable, and profitable."

    Along with layoffs, BuzzFeed also sold digital media company Complex Networks, which it acquired in 2021 for about $300 million, to live video shopping platform NTWRK in a $108.6 million all-cash deal. BuzzFeed received approximately $5.7 million in severance and office-related charges on top of the purchase price.

    Last week, the company reported an adjusted EBITDA loss of $11.3 million in the first quarter but said it expects adjusted EBITDA to come in the range of a $4 million loss to $1 million profit in the current quarter, "approximately flat year-over-year at the midpoint."

  • Josh Schafer

    Stocks open near flat

    US stocks hovered near record highs on Wednesday as investors waited for AI bellwether Nvidia's (NVDA) pivotal earnings and for more clues to the Federal Reserve's thinking on interest rate cuts.

    The S&P 500 (^GSPC) fell about 0.1% while the Dow Jones Industrial Average (^DJI) slipped roughly 0.2%. The Nasdaq Composite (^IXIC) popped nearly 0.1%.

    Markets meandered in the wait to find out whether Nvidia will deliver on sky-high earnings expectations. Investors are bracing for a big move in the chipmaker's share price and in other potential AI plays after the first quarter results, set for release after the bell. It all adds up to a big test for the broader market as a whole.

  • Brian Sozzi

    Target's stock getting pounded

    Top trending ticker on the Yahoo Finance platform this morning: Target (TGT).

    And that says a lot considering it's Nvidia (NVDA) earnings day!

    Shares of the retailer are getting pounded by 8% premarket after an earnings miss and cautious guidance. My full breakdown of the quarter here. I will be on Yahoo Finance at 9 a.m. ET with more details, so tune in.

    I will add a little more context here, however.

    I was on a reporter call with Target chairman and CEO Brian Cornell discussing the results. There was talk of inflation cooling down, but his commentary stopped short of saying that sales were growing again because of a slower pace of inflation.

    To the Target bulls out there — and there are many — that's a problem.

  • Brian Sozzi

    And we're back on Nvidia

    It's almost showtime for Nvidia (NVDA), with earnings out after the close today.

    It could be a wild 48 hours in markets because of this one stock.

    Current premiums in options markets imply that traders are bracing for an 8.6% swing in the stock price in either direction, reports the Financial Times this morning.

    If Nvidia does react negatively to the results and guidance, it will be hard to shake the bull case on the stock, most on the Street say.

    "Even if there is weakness from some unforeseen force in the near-term, we see limited stock weakness as investors want to keep or add to positions for second half Blackwell [new AI chip] growth," Piper Sandler analyst Harsh Kumar said in a note this morning.

    Game on.

    Yahoo Finance tech editor Dan Howley previews Nvidia's results here.

  • Brian Sozzi

    Goldman keeps it real on government debt

    Goldman Sachs just served up a new piece of research that will likely be eaten up by politicians who love talking about the country's ballooning debt.

    The bank's economics team lifted its debt-to-GDP ratio to 130% by 2034, up from 97% in projections published in 2019.

    "The outlook for US fiscal sustainability has become more challenging over the last five years. The primary deficit — the deficit excluding interest costs on the debt — remains roughly 5% of GDP wider than it has been historically at full employment, the debt-to-GDP ratio has risen 19 percentage points to 98% and will likely soon surpass the post-WW2 high, and interest rates on new Treasury debt have roughly doubled. Higher expected future interest rates in particular have substantially worsened the trajectories of the debt-to-GDP ratio and of real interest expense as a share of GDP," said Goldman Sachs chief economist Jan Hatzius.

    The unsavory chart is below.

    Goldman Sachs sees a path higher for the country's already bloated debt position.
    Goldman Sachs sees a path higher for the country's already bloated debt position. (Goldman Sachs)