by Noel Randewich and Johann M Cherian
(Reuters) – The New York Stock Exchange ended lower on Wednesday ahead of the highly anticipated quarterly results from artificial intelligence (AI) heavyweight Nvidia, which could either fuel the AI hype or weigh on tech companies and the market.
The Dow Jones index fell 0.39% to 41,091.42 points.
The broader S&P 500 lost 0.60% to 5,592.18 points.
The Nasdaq Composite fell by 1.12% to 17,556.03 points.
Nvidia, which has surged more than 150% this year, fell 2.1% before reporting results after the close.
Investors are wondering what benefits AI can bring, and when, as big additional spending to develop the technology announced by Microsoft, Alphabet and others has fueled concerns.
“It’s the poster child for the rise of AI… so it would be difficult for the market to move forward if Nvidia disappointed,” warned Keith Buchanan, portfolio manager at GLOBALT Investments in Atlanta.
“Nobody knows how long Nvidia can continue to surprise positively, but obviously it can’t last forever,” he added.
Other semiconductor makers were down Wednesday, including Broadcom and Advanced Micro Devices, which lost more than 2%.
Tech giants Alphabet, Microsoft and Amazon also declined, by about 1%.
Among the eleven major sectors of the S&P-500, eight ended in the red, including information technology.
Financial markets are expecting the US Federal Reserve (Fed) to cut rates in September, with Fed chief Jerome Powell saying last week that he supported an imminent easing of monetary policy. According to FedWatch, 64% of traders are currently betting on a 25 basis point rate cut, compared to 37% for a 50 basis point rate cut.
The monthly report on personal consumption in the United States, due for release on Friday, could provide additional clues about the Fed’s decision.
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(Written by Jean Terzian)
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