Stock Market News Today- Morning- 2/21/24

Market Braces for Nvidia’s Q4 Earnings Amidst Lingering Tuesday Sell-Off

February 21, 2024

Wall Street’s momentum remains tempered in the aftermath of Tuesday’s sell-off, mainly driven by concerns surrounding small-cap and tech stocks. Attention now turns to Nvidia Corp. (NASDAQ:NVDA) as investors eagerly anticipate the release of its fourth-quarter earnings report post-closing.

Given the critical nature of this event, a sense of caution prevails among investors who are keenly awaiting Nvidia’s performance. The anticipation is further heightened by uncertainties surrounding the company’s ability to meet the soaring expectations set for it.

Compounding the market’s unease are impending speeches by Federal Reserve officials and the release of the Fed minutes. Both events hold the potential to offer insights into the future direction of interest rates, a significant factor influencing investor sentiment.

Highlights from Tuesday’s Trading:

Three pivotal developments weighed heavily on the markets:

1. Mixed Retail Earnings: Reports from retailers presented a mixed outlook, leaving investors uncertain about the health of the consumer sector.
2. Nvidia Anxiety: Concerns mounted regarding Nvidia’s ability to meet the high expectations for its upcoming earnings report.
3. Decline in Leading Economic Index: The Conference Board’s leading economic index experienced a larger-than-expected drop, raising concerns about future economic growth.

These factors contributed to a subdued market atmosphere, resulting in major averages experiencing declines:

• Tech-heavy Nasdaq and S&P 500 both opened lower and remained below the flatline throughout the session. The S&P 500 even dipped below the psychological barrier of 5,000.
• The Dow witnessed some morning volatility but ultimately closed lower.
• Small-caps, as represented by the Russell 2000, underperformed, dropping 1.41%.
• Among sectors, only consumer staples, led by Walmart’s positive results, managed to escape the overall decline. Conversely, IT and consumer discretionary stocks took the biggest hits.

US Index Performance on Tuesday:

• Nasdaq Composite: -0.92% to 15,630.78
• S&P 500 Index: -0.60% to 4,975.51
• Dow Industrials: -0.17% to 38,563.80
• Russell 2000: -1.41% to 2,004.14

Market Analyst Insights:

Tom Lee of Fund Strat highlights the Fed as the market’s biggest risk. He suggests that the market needs to broaden for sustained rally, which might occur when interest-rate cuts begin to be priced in, and investors contemplate the roadmap. Lee warns that if inflationary pressures persist and the Fed shifts its stance, it could put significant pressure on stocks.

Futures Today:

As of 6:46 am ET on Wednesday:

• Nasdaq 100: -0.46%
• S&P 500: -0.21%
• Dow: -0.18%
• Russell 2000: -0.47%

In premarket trading, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.26% to $498.20, while the Invesco QQQ ETF (NASDAQ:QQQ) dropped 0.39% to $428.91, according to Benzinga Pro data.

Upcoming Economic Data:

Various Federal Reserve officials are scheduled for public appearances throughout the day, while the Treasury plans to auction 20-year bonds. The Fed is also set to release the minutes of its January rate-setting meeting, which will be closely scrutinized for insights into the interest rate outlook.

Earnings and Stocks in Focus:

• Palo Alto Network, Inc. (NASDAQ:PANW) fell over 22.50% in premarket trading following its earnings report. Other cybersecurity stocks such as Zscaler, Inc. (NASDAQ:ZS) and CrowdStrike Holdings, Inc. (NASDAQ:CRWD) also moved sharply lower.
• Notable companies reporting earnings ahead of the market open include Analog Devices, Inc. (NASDAQ:ADI), Bausch + Lomb Corporation (NYSE:BLCO), Canadian Natural Resources Limited (NYSE:CNQ), Garmin Ltd. (NYSE:GRMN), Wingstop Inc. (NASDAQ:WING), Wix.com Ltd. (NASDAQ:WIX), and Wolverine World Wide, Inc. (NYSE:WWW).

Commodities, Bonds, Other Global Equity Markets:

In early European session trading, crude oil futures fell 0.42% to $76.72 after dropping 1.13% on Tuesday. The benchmark 10-year Treasury note slipped to 4.271%.

Most Asian markets retreated on Wednesday, with European stocks showing cautious optimism by late-morning trading.

Source: Benzinga- https://www.benzinga.com/news