NEW YORK: US stocks fell on Tuesday, pulling back after a recent streak of gains as investors awaited Nvidia’s quarterly results and minutes of the Federal Reserve’s last policy meeting for clues on the central bank’s interest rate path.
A technology-fueled rally led the S&P 500 and the Nasdaq to register their highest closing levels in over three months on Monday, as investors continued to bet that the Fed was at the end of its rate-hiking cycle.
Both indexes were on track to snap a five-day winning streak on Tuesday.
Equities are giving back some of their recent gains, said Roosevelt Bowman, senior investment strategist at Bernstein Private Wealth Management.
“What’s supportive of markets going into the end of the year is reduced uncertainty around the Federal funds rate and reduced interest rate volatility,” Bowman said.
Big Tech stocks, which have powered most of the S&P 500’s gains this year, face an important test, with Nvidia due to report third-quarter results after markets close.
The chip designer is expected to deliver yet another strong revenue forecast, but the focus will be on the impact of widening US curbs on sales of its high-end chips to China.
Shares of Nvidia slipped 1.8%. Most other megacap stocks, such as Microsoft and Amazon.com, also fell.
Before Nvidia’s quarterly report, minutes of the Fed’s November meeting are likely to offer more cues on the monetary policy path after evidence of easing consumer and producer prices boosted expectations that US interest rates had peaked. The minutes are due to be released at 1400 ET (1900 GMT).
Traders have fully priced in the probability that the Fed will hold interest rates steady in December, with 29% betting on the likelihood that the central bank will deliver a rate cut as soon as March, according to the CME Group’s Fedwatch tool.
At 11:41 a.m. ET, the Dow Jones Industrial Average was down 96.87 points, or 0.28%, at 35,054.17, the S&P 500 was down 17.77 points, or 0.39%, at 4,529.61, and the Nasdaq Composite was down 123.49 points, or 0.86%, at 14,161.04.