U.S. Stocks Dip Ahead of Nvidia's Highly Anticipated Report

U.S. stocks fell as investors awaited Nvidia's quarterly report, which could impact the ongoing rally fueled by optimism around artificial intelligence. Nvidia's performance is seen as crucial, given its dominance in AI processors. Wall Street predicts significant movement in Nvidia's shares following the report. Other major tech stocks also declined.

U.S. stocks declined on Wednesday as investors geared up for Nvidia's quarterly report, a major event that could either support or derail the current rally driven by artificial intelligence optimism. Shares of Nvidia, the leading seller of AI processors, dipped ahead of its report, cutting its year-to-date gains to about 150%.

Following multiple strong quarterly performances, Nvidia is viewed as the biggest beneficiary of the AI boom. However, its latest results come amid concerns over rising expenditures by major tech players like Microsoft and Alphabet, who are racing to lead in AI technology. According to Keith Buchanan, senior portfolio manager at GLOBALT Investments, a disappointing report from Nvidia could significantly affect the market's momentum.

Options pricing indicates traders expect a nearly 10% move in Nvidia's shares on Thursday, following its report. Other chip stocks, including Broadcom and Advanced Micro Devices, also saw declines, as did tech giants Google-owner Alphabet, Microsoft, and Amazon. Preliminary data showed the S&P 500 dropped by 33.30 points, the Nasdaq Composite fell by 198.79 points, and the Dow Jones Industrial Average decreased by 156.26 points.

(With inputs from agencies.)