U.S. markets looked directionless early Wednesday as traders awaited several major earnings releases, with Nvidia (NASDAQ:NVDA) once again expected to take center stage. The chipmaker’s quarterly results could play a decisive role in shaping momentum around the artificial intelligence boom, especially after the recent pullback in tech stocks. Meanwhile, Lowe’s (NYSE:LOW) and Target (NYSE:TGT) are set to provide key updates on consumer spending ahead of the holiday season, and the Federal Reserve is due to release the minutes from its October policy meeting.
Futures tread water
Around 02:37 ET, futures tied to the Dow, S&P 500, and Nasdaq 100 showed minimal movement as investors digested Tuesday’s steep declines. The weakness extended a multiday selloff driven by fears that heavy, often debt-financed AI investments and stretched tech valuations may no longer be sustainable.
Chipmakers bore the brunt of the pressure once again, with names like Advanced Micro Devices (NASDAQ:AMD), Marvell (NASDAQ:MRVL) and Micron (NASDAQ:MU) dragging the Nasdaq Composite lower.
Adding to the uneasy tone, Bank of America’s survey of fund managers showed that the biggest “tail risk” for markets is the possibility that the AI sector is in a “bubble.”
In corporate news, Home Depot (NYSE:HD) tumbled 6% after cutting its full-year outlook, setting a cautious tone ahead of a wave of retail earnings due in the coming days.
Fresh labor data offered a mixed picture: ADP reported a slowdown in private-sector layoffs through early November, while government figures showed a notable rise in continuing unemployment claims from mid-September to mid-October.
Spotlight on Nvidia
Investor attention now turns squarely to Nvidia. With a market cap of $4.41 trillion and more than 7% weighting in the S&P 500, the company’s performance has the potential to sway both equity markets and broader economic expectations. Analysts at Capital Economics emphasize that AI is fueling not just stock prices but also U.S. economic growth, making Nvidia’s results especially consequential.
Consensus expectations, compiled by Bloomberg, point to third-quarter revenue of $55.19 billion and adjusted operating income of $36.46 billion.
Stifel analysts wrote that “[w]e expect the near-term investor debate to remain centered on the sustainability of infrastructure investment,” despite ongoing increases in hyperscaler spending. They added that concerns about circular deal-making in the AI ecosystem — much of it involving Nvidia — have “increased as well,” though the firm remains “best positioned” to benefit from accelerating AI compute demand.
Nvidia shares slipped 2.8% on Tuesday ahead of the report.
Lowe’s and Target set to report
Lowe’s and Target will issue their latest results before U.S. markets open, alongside off-price retailer TJX Companies (NYSE:TJX). Walmart (NYSE:WMT) follows on Thursday.
Retailers have been a focal point for investors this week, particularly after the extended government shutdown left markets without key data on consumer conditions. Home Depot’s update on Tuesday painted a more pessimistic picture, noting that expectations for lower interest rates to revive large home improvement spending failed to materialize. Uncertainty linked to elevated U.S. tariffs has also weighed on consumer willingness to undertake major projects.
Fed minutes ahead
Later Wednesday, markets will parse the minutes from the Federal Reserve’s October meeting. Policymakers reduced rates by 25 basis points last month to a range of 3.75%–4%, after a similar cut in September.
Fed Chair Jerome Powell has since cautioned that, despite widespread expectations, a December rate cut is not guaranteed. Several officials have called for patience following the data blackout during the shutdown, though Fed Governor Christopher Waller recently signaled support for another reduction.
As tracked by CME’s FedWatch Tool, the odds of a December cut sit near 50%.
Bitcoin finds support
Bitcoin (COIN:BTCUSD) saw a bounce on Wednesday after a slide that erased its year-to-date gains. Risk sentiment has been undermined by the broader market’s discomfort with the AI theme and the uncertain outlook for U.S. rates.
According to Reuters, U.S. Bitcoin-linked ETFs have seen around $3.7 billion in outflows since October 10, when renewed U.S.-China trade tensions rattled markets. Data from CoinGecko indicate that total cryptocurrency market capitalization has shrunk by roughly $1.2 trillion over the past six weeks.
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