Stocks are little changed ahead of Nvidia quarterly results: Live updates

The Russell 2000 is 6.2% higher in May, slightly outpacing the S&P 500’s 5.5% rise.

Year to date, however, the small-cap index is still lagging the broader market. Compared to the S&P 500‘s 11.4% rise, the Russell 2000 is up just 3.4%.

This semiconductor supplier could benefit from another good forecast from artificial intelligence darling Nvidia, according to Morgan Stanley.

This company is “the sole supplier for NVDA AI GPU, so we view NVDA’s July-quarter revenue guidance, due on May 22, as a key catalyst,” wrote analyst Charlie Chan. 

Read more on the call here.

— Samantha Subin

Check out the companies making the biggest moves midday:

The full list can be found here.

— Michelle Fox

JPMorgan shares bounced slightly Tuesday following a dive in the prior session.

The financial giant added around 1% midday Tuesday, but it is still down more than 3% on the week, underscoring the strength of Monday’s drop. If this holds through week-end, it will be the worst performer in the Dow.

JPMorgan’s Monday slide followed commentary from CEO Jamie Dimon during the bank’s investor day. Dimon signaled that his retirement could be coming and that the company’s shares were too expensive for major buybacks.

Despite this week’s turbulence, the stock is still up more than 16% on the year.

— Alex Harring

Airline stocks were struggling Tuesday in an otherwise calm day on Wall Street.

The U.S. Global Jets ETF (JETS) was down 1.3% in early afternoon trading. That would be the biggest drop for the fund since May 7.

Shares of American Airlines were down about 2%, while United and Delta dipped about 1.7% each.

There was no clear catalyst for the decline, though it does follow news that one passenger died following severe turbulence on a Singapore Airlines flight.

— Jesse Pound

Artificial intelligence’s ability to transform traditional industries, such as education and music, indicated strong earnings growth ahead for AI companies and the tech sector, according to UBS.

“The structural growth prospects of artificial intelligence remain appealing,” Solita Marcelli, chief investment officer Americas for UBS Global Wealth Management, wrote in a Tuesday note. “We see strong earnings growth ahead for AI-related names and the broader global tech sector, forecasting earnings growth of 20% this year and 16% in 2025.”

While investors are looking toward Nvidia’s earnings report Wednesday “as the next potential catalyst,” Marcelli believes the equity rally remains supported by fundamental factors.

“We think it is key for investors to hold a healthy strategic allocation to technology stocks, and see opportunities in small- and mid-cap stocks, as well as growth themes like the low-carbon transition, healthtech, and ocean economy,” Marcelli added.

— Hakyung Kim

Despite an earnings beat, Lowe’s said its operating profit margin fell more than 2 percentage points from the year-ago quarter, hurt in part by early spring promotional activity. Executives told analysts that the home improvement retailer’s value-promoting initiatives triggered “a little bit of margin pressure,” but they also remarked they were “really pleased that we were able to manage that and offset that within SG&A [selling, general and administrative] expenses and still deliver the bottom line number.”

Macy’s earnings beat was also buoyed by cost cuts as it revamps operations. The department store chain noted that the merchandise margin fell 1 percentage point from a year ago, “primarily reflecting additional discounting for slower-moving warm weather products.” Executives told analysts they expect the environment to remain promotional as the consumer “will remain under pressure for the rest of the year.”

Meanwhile, Wall Street will be watching Target’s profit margins when it reports results tomorrow morning. Just ahead of its earnings report, the big-box retailer on Monday announced plans to cut prices on 5,000 food, beverage and household essential items during the next few months. Although that is welcome news to the consumer, those cuts could undermine Target’s profitability as groceries are already a very low-margin business.

A top JPMorgan strategist is holding firm on his negative outlook for the stock market.

Marko Kolanovic said in a note to clients Monday night that the firm’s strategy team was still underweight equities. The note came shortly after strategists from Deutsche Bank and Morgan Stanley raised their S&P 500 targets.

“We don’t see a reason to change our stance,” Kolanovic wrote.

— Jesse Pound

It has been more than a month since a majority of S&P 500 sectors have notched a 52-week high, according to Bespoke Investment Group.

While the broad index has traded near record levels in recent days, not all of the sectors have moved in lockstep. It has been more than 40 calendar days since the material and energy sectors clinched a fresh 52-week high, and more than 50 calendar days for health care and industrials.

Consumer discretionary has not seen a new record by this time in 80 days, as of Monday. It has been more than 140 days for real estate.

— Alex Harring

Despite worry over stagflation last month amid a market sell-off, hedge funds “emerged as dip buyers” and “showed more resilience with no signs of capitulation,” according to Barclays head of U.S. equity strategy Venu Krishna.

“In fact, we believe better-than-expected earnings appear to have motivated dip buying by hedge funds, especially in the equity futures market,” Krishna said.

— Brian Evans

Coffee futures jumped 4.7% Tuesday and headed for a third consecutive winning day.

Prices also hovered near their highest level since May 2, hitting a high of $216.10 per pound. Coffee futures have risen more than 16% since the start of the year.

— Samantha Subin, Gina Francolla

Shares of JPMorgan ended Monday’s trading session 4.5% lower, after CEO Jamie Dimon said during the bank’s investor day that it would not be engaging in as many near-term stock buybacks.

However, Morgan Stanley analyst Betsy Graseck believes this was an overreaction. “The market clearly interpreted this to mean no buybacks. Our interpretation is that JPM will increase buybacks slightly over the $2B per quarter pace mentioned on earnings,” she wrote.

On the other hand, Graseck pointed out that this lower buyback strategy indicates JPMorgan’s prioritization of long-term growth, while its stock valuation still stands firm.

The analyst is also bullish JPMorgan for several other reasons, including strong market share gain. The bank is also budgeting around $17 billion this year to spend in technological applications, with potential use cases in artificial intelligence.

Graseck added that JPMorgan’s history of beating its net interest income also makes the stock more compelling here. “Expect asset sensitive JPM to outperform in a higher for longer scenario,” she added.

— Lisa Kailai Han

Fed Governor Christopher Waller said Tuesday that he would like to see more good data on the inflation front before lowering rates.

“The economy now seems to be evolving closer to what the Committee expected,” he said. “Nevertheless, in the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy.”

— Fred Imbert

The S&P 500 and Nasdaq Composite started Tuesday’s trading session in the red.

The broad market index fell 0.2% and the tech-heavy Nasdaq decline 0.4%.

Meanwhile, the Dow Jones Industrial Average traded near the flatline.

— Hakyung Kim

Check out some of the companies making headlines in premarket trading:

• Macy’s — The department store operator added about 3% after beating earnings estimates for the first quarter and raising its full-year outlook. Macy’s touted its turnaround plan as a driver for the strong results.
• Lowe’s — The home improvement stock rose more than 2% after the company’s first-quarter results topped estimates. Lowe’s reported $3.06 in earnings per share on $21.36 billion of revenue. Analysts surveyed by LSEG expected $2.94 in earnings per share on $21.12 billion of revenue.
• AutoZone — Stock in the automotive parts retailer slipped more than 2% after third-quarter revenue missed analysts’ estimates. AutoZone reported revenue of $4.24 billion, while analysts polled by FactSet forecast $4.29 billion. The company’s fiscal third-quarter earnings of $36.69 per share surpassed estimates that called for $36.02.

Read the full list here.

— Brian Evans

Equity markets have rallied to record heights in recent days, and according to Deutsche Bank, there is good reason for this to continue.

In a recent note, macro strategist Henry Allen outlined several factors that should cause investors to be optimistic.

For one, investors already sent stocks rallying after last week’s CPI reading, which still came in above target at an annualized growth pace of 3.6%. With this in mind, it stands to hold true that should inflation prints move lower toward target, investors could use further optimism to send stocks flying once again.

Softer-than-expected economic data could also boost the market by spurring the chances of a rate cut, such as April’s jobs report. The market still rallied, despite the reading coming in slightly below expectations.

Additionally, Allen wrote that globally, “rate cuts are moving increasingly into view at a global level.” This, combined with “very accommodative” financial conditions for equities, spells an extremely benign backdrop for markets right now.

— Lisa Kailai Han

Macy’s shares gained 2.6% in the premarket. The department store chain posted fiscal first-quarter earnings that topped Wall Street’s expectations, driven by early progress in its turnaround strategy. It also raised its full-year earnings expectations.

Macy’s reported adjusted earnings of 27 cents per share, topping the LSEG consensus estimate of 15 cents. On the other hand, adjusted revenue of $4.85 billion came in lower than the expected $4.86 billion.

Still, the retailer said in a statement that it “assumes customers will continue to be discerning in their discretionary purchases.”

— Sarah Min, Melissa Repko

Lowe’s shares rose more than 2% in the premarket after the home improvement retailer posted earnings and revenue that beat expectations. The company earned $3.06 per share on revenue of $21.36 billion. Analysts expected a profit of $2.94 per share on revenue of $21.12 billion, per LSEG.

Comparable store sales, a key metric for retailers, fell 4.1%, less than the consensus expectation for a 5.5% decline.

— Fred Imbert

China’s urban unemployment rate for people ages 16 to 24 dropped to 14.7% in April, compared to 15.3% in March.

Data from the country’s statistics bureau said the figure excludes those still in school, as per a revised definition since December 2023.

China revamped its definition of youth unemployment after the government stopped reporting data in June 2023, as it rose past a record high of more than 21%.

— Lim Hui Jie