Wall St range-bound on Fed policy caution, Nvidia results watch
Business
Wall St range-bound on Fed policy caution, Nvidia results watch
(Reuters) - The main U.S. indexes oscillated within a tight range on Tuesday as investors grew cautious ahead of AI chip leader Nvidia's earnings this week and Federal Reserve officials emphasized the central bank was in no hurry to ease interest rates.
Nvidia (NVDA.O), opens new tab, Wall Street's third-most valuable firm, will report quarterly earnings on Wednesday in what is likely to be a significant market trigger and a litmus test for the success of the generative AI boom.
"For investors to drive Nvidia shares even higher, they're going to be looking for some very aggressive forward numbers that keeps them feeling that the stock could continue on its upward climb," said Rick Meckler, partner at Cherry Lane Investments.
Data from options analytics firm Trade Alert showed Nvidia's options are primed for an 8.7% swing, or $200 billion in market cap, in either direction by Friday.
Investors also awaited minutes from the Fed's last policy meeting, due on Wednesday, with two rate-setters on Tuesday saying it was prudent to wait several more months to ensure inflation really is back on a path to the 2% target before commencing rate cuts.
Traders currently factor in about 44 basis points of rate reductions this year, with a quarter-point cut fully priced in for November.
Consumer discretionary (.SPLRCD), opens new tab was the worst hit major S&P 500 sector index, dragged by a 3.1% drop in Lowe's (LOW.N), opens new tab after the home improvement company warned of operating margin pressure in the current quarter.
