Tech Stocks Slide as Investors Await Nvidia Earnings

Wall Street's major indexes fell on Wednesday, led by the Nasdaq, as investors awaited Nvidia's earnings. The anticipation has put pressure on tech stocks, with notable declines in companies like Meta, Microsoft, and Alphabet. Analysts warn that any disappointment in Nvidia’s results could impact market sentiment further.

Wall Street's major indexes were lower on Wednesday, with the Nasdaq leading declines as investors anticipated Nvidia's earnings report. The focus remains on whether the recent bull market rally, fueled by AI chip stocks like Nvidia, can be sustained.

This week, the Dow neared a record high and the S&P 500 came within 1% of an all-time peak. Nvidia's shares dropped 2.5% ahead of its earnings, with options pricing suggesting a 9.8% move in its stock post-reporting. Analysts indicate any disappointment could adversely affect semiconductor and megacap stocks.

Other chip stocks like Broadcom and AMD also saw declines. Growth stocks, including Meta, Microsoft, and Alphabet, were in the red. The Dow Jones Industrial Average fell 137.89 points, while the S&P 500 and Nasdaq Composite dropped 35.66 and 214.22 points, respectively. Technology stocks led sector declines, although bank stocks rose more than 1%.

Further optimism hinges on the U.S. Federal Reserve potentially lowering interest rates in September. Market data suggests a higher likelihood of a 25-basis point reduction. Friday's Personal Consumption Expenditure report is expected to provide additional clues on the central bank's rate trajectory.

Super Micro Computer tumbled 24.8% after delaying its annual report filing. Meanwhile, Berkshire Hathaway's market value surpassed $1 trillion. Declining issues outnumbered advancers on both the NYSE and Nasdaq.

(With inputs from agencies.)