By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -Wall Street’s main indexes dropped on Wednesday, as AI giant Nvidia (NASDAQ:) lost ground ahead of quarterly results, retailer Target (NYSE:)’s shares plunged following weak forecasts and heightened Russia-Ukraine tensions impacted investor sentiment.
Nvidia is scheduled to report results after the bell and its shares were down 1.2%, reversing modest premarket gains.
The index heavyweight dragged on the Information Technology sector as well as the tech-laden Nasdaq.
Meanwhile, Target plunged 21% after the retailer forecast holiday-quarter comparable sales and profit below Wall Street expectations following a third-quarter estimate miss.
It dragged on other retailers such as Dollar Tree (NASDAQ:) and Dollar General (NYSE:), which fell 4.7% and 4.1%, respectively. Walmart (NYSE:) edged 0.5% lower after posting strong results in the previous session.
The Consumer Staples index was off 1%.
Among other growth stocks, Tesla (NASDAQ:) lost 1.3% and Amazon.com (NASDAQ:) shed 1.4%, pulling Consumer Discretionary down 1%.
Investors also continued to assess geopolitical tensions between Russia and Ukraine. Stock futures had turned slightly lower after a report Ukraine fired long-range British Storm Shadow missiles into Russian territory.
But the spotlight remained on Nvidia, which has nearly tripled in value this year, accounting for about 20% of the ‘s returns over the last 12 months, according to BofA Global Research.
However, given the lofty earnings expectations, the company could struggle to impress investors. Options traders are primed for a nearly $300-billion swing in Nvidia’s market value after the results.
Still, investors appeared optimistic about Nvidia’s results and the broader equity outlook.
“We’re starting to gain traction again,” said Adam Sarhan, chief executive of 50 Park Investments.
“There’s some optimism Nvidia is going to report good numbers… you had earnings yesterday from Walmart, a good proxy of how the low-end consumer is doing, and if the low-end consumer is doing well, investors are happy that the economy’s not going to crumble.”
At 09:53 a.m. the rose 1.09 points, or flat, to 43,270.03, the S&P 500 lost 20.79 points, or 0.35%, to 5,896.19 and the lost 94.90 points, or 0.50%, to 18,892.57.
Cryptocurrency stocks ticked higher as bitcoin briefly jumped above $94,000, with MicroStrategy and MARA Holdings up 11.7% and 9.2%, respectively.
Comments from Federal Reserve officials including Lisa Cook, Michelle Bowman and Susan Collins are expected through the day.
Traders have increased bets on the U.S. central bank leaving interest rates unchanged at its December meeting, in the wake of strong economic data and signs of persistent inflation. They see a 44.5% chance of a pause next month, according to CME’s FedWatch tool.
Comcast (NASDAQ:) pared gains and rose marginally after the media company said it plans to spin off some NBCUniversal cable TV networks, as the rise of streaming prompts it to relinquish some of its most prized assets.
Declining issues outnumbered advancers by a 1.61-to-1 ratio on the NYSE, and by a 1.41-to-1 ratio on the Nasdaq.
The S&P 500 posted 24 new 52-week highs and six new lows, while the Nasdaq Composite recorded 49 new highs and 75 new lows.
