Author: Reuters

By Georgina McCartney

HOUSTON (Reuters) -Oil futures rose on Thursday as Iran-aligned Houthis stepped up attacks in the Red Sea near Yemen, but a large build in U.S. crude inventories weighed on gains.

Brent crude futures were up 66 cents to $83.69 a barrel at 13:23 ET (18:23 GMT). U.S. West Texas Intermediate crude futures were up 76 cents at $78.67 a barrel.

Yemen’s Iran-aligned Houthis will escalate their attacks on ships in the Red Sea and other waters and have introduced “submarine weapons”, the group’s leader said on Thursday, as the group keeps up attacks on shipping to show support for Palestinians in the Gaza war.

“The Red Sea situation continues to ferment and it is starting to register more with the market that this is an issue that is not going away”, John Kilduff, a partner at New York-based Again Capital said.

“Europe is bearing the brunt in terms of supply – but European supply problems become U.S. supply problems because that will put a call on US gasoline and diesel”, he added.

Market players are likely to be pricing in a potential disruption to supply in the near-future, with the front-month contract’s premium over the second widening, which “indicates a tightening market”, UBS analyst, Giovanni Staunovo said in a note.

On Thursday, the premium for front-month crude futures to the next month was up to 75 cents per barrel, its widest since late October.

Even so, a jump in crude inventories last week following refinery maintenance and outages limited gains.

U.S. crude inventories rose by 3.5 million barrels to 442.9 million barrels in the week ending Feb. 16, the U.S. Energy Information Administration said on Thursday, compared with analysts’ expectations in a Reuters poll for a 3.9 million-barrel rise.

U.S. crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are soon to resume output.

Refinery utilization rates were unchanged last week, at 80.6%, according to EIA data on Thursday, compared with analysts’ expectations of an uptick to 81.5%, according to a Reuters poll.

BP’s 435,000 barrel-per-day (bpd) Whiting refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.

TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.

The outages have drawn down distillate inventories, which include diesel and heating oil. Those stockpiles were down by 4 million barrels in the week to 121.7 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA data showed.

(Additional reporting by Colleen Howe and Jeslyn Lerh; editing by David Evans, Kirsten Donovan, Alexandra Hudson)

By Amruta Khandekar and Bansari Mayur Kamdar

(Reuters) -The benchmark S&P 500 index hit a fresh record high on Thursday after a blowout revenue forecast from AI darling Nvidia boosted investor confidence in the sector and sparked a rally in growth and technology stocks.

Nvidia’s shares surged 15.2% after the chip designer forecast a roughly three-fold surge in first-quarter revenue on strong demand for its AI chips and beat expectations for fourth-quarter revenue.

This pushed the benchmark S&P 500 up 1.71% at 11:34 a.m. ET, to an all-time high of 5,066.81 points.

Nvidia’s earnings were a major test for the AI-fueled rally on Wall Street that first pushed the S&P 500 above the 5,000 point mark earlier this month. Some analysts had cautioned that disappointing results could spark a steep selloff among technology stocks.

“The whole package of Nvidia’s reporting lends a bedrock of credibility for other AI and technology companies as it clearly appears that Nvidia and AI are here to stay,” said Andre Bakhos, president at Ingenium Analytics.

The Dow Jones industrials also hit a record high of 38,994.50 points earlier in the day and was last up 280.22 points, or 0.73%, at 38,892.46. The Nasdaq Composite was up 380.60 points, or 2.44%, at 15,961.47.

Nvidia was set to add over $250 billion to its market capitalization if gains held, beating Meta Platform’s $196 billion surge earlier this month in the biggest one-day gain by any company in Wall Street history.

The benchmark index will finish this year above the 5,000 mark, according to strategists in a Reuters poll.

Nine of the 11 major S&P 500 sectors rose, with technology stocks leading gains with a 3.8% jump.

The S&P 500 growth index rose 2.8%, headed for its biggest one-day percentage gain since November 2022.

Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia’s rival Advanced Micro Devices, server component supplier Super Micro Computer and Arm Holdings jumped between 7.6% and 26%.

The Philadelphia Semiconductor index hit a record high, jumping 4.7%.

Big Tech and growth stocks such as Alphabet, Microsoft and Meta Platforms rose between 1.8% and 4%.

Meanwhile, investors’ bets are tilted towards June as the starting point for the first rate cut from the Federal Reserve.

Fed Vice Chair Philip Jefferson said on Thursday he would be looking at the totality of incoming economic data in assessing the time for the U.S. central bank to begin cutting its benchmark policy rate.

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a tight labor market.

Rivian and Lucid fell 27.0% and 19.5%, respectively, after the electric vehicle startups forecast 2024 production well below analyst estimates on slowdown in demand.

Advancing issues outnumbered decliners by a 1.88-to-1 ratio on the NYSE and by a 1.21-to-1 ratio on the Nasdaq.

The S&P index recorded 66 new 52-week highs and one new lows, while the Nasdaq recorded 84 new highs and 90 new lows.

(Reporting by Amruta Khandekar and Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)

By Georgina McCartney

Houston (Reuters) -Oil futures rose on Thursday as attacks continued on shipping in the Red Sea near Yemen but a large build in U.S. crude inventories curbed gains.

Brent crude futures were up 51 cents to $83.54 a barrel at 11:49 ET (1649 GMT). U.S. West Texas Intermediate crude futures were up 64 cents at $78.55 a barrel.

Two missiles were fired at a vessel off the southeast coast of Yemen on Thursday, causing a fire onboard, British maritime agencies said, as Houthis keep up attacks on shipping to show support for Palestinians in the Gaza war.

“[Hostilities] in and around the Red Sea by Iran-backed Houthi rebels on commercial ships are guaranteed to continue keeping the geopolitical risk premium at an elevated level,” PVM Oil’s Tamas Varga said.

Even so, a jump in crude inventories last week following refinery maintenance and outages limited gains.

U.S. crude inventories rose by 3.5 million barrels to 442.9 million barrels in the week ending Feb. 16, the U.S. Energy Information Administration said on Thursday, compared with analysts’ expectations in a Reuters poll for a 3.9 million-barrel rise.

U.S. crude inventories have climbed amid outages at large refineries that have left utilization rates at the lowest level in two years, though the plants are soon to resume output.

Refinery utilization rates were unchanged last week, at 80.6%, according to EIA data on Thursday, compared with analysts’ expectations of an uptick to 81.5%, according to a Reuters poll.

BP’s 435,000 barrel-per-day (bpd) Whiting refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.

TotalEnergies’ 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.

The outages have drawn down distillate inventories, which include diesel and heating oil. Those stockpiles were down by 4 million barrels in the week to 121.7 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA data showed.

(Additional reporting by Colleen Howe and Jeslyn Lerh; editing by David Evans, Kirsten Donovan)

By Medha Singh

(Reuters) -Nvidia galloped to $2 trillion market value on Thursday after the bellwether for AI chip demand once again exceeded Wall Street’s sky-high expectations, re-igniting a global rally in tech stocks.

The chipmaker returned as the third most valuable U.S. company as its shares jumped 15% to a record high of $780.85. If the gains hold, Nvidia will add about $260 billion to its market capitalization.

The rally in the top performing S&P 500 stock also lifted its counterparts in the chip sector, sending the benchmark index, Europe’s STOXX 600 and Japan’s Nikkei share average to record highs.

The stock that has jumped nearly 57% this year has emerged as the centerpiece of Wall Street’s gain as it accounted for more than a quarter of the S&P 500’s gains in 2024, making its quarterly results crucial for equity investors.

“It’s giving insight into just how dominant they are in an incredibly high growth space,” said Paul Marino, chief revenue officer at GraniteShares ETFs.

“Everything that they touch in the semiconductor area from robotics, crypto, AI, gaming to autonomous vehicles.. they are producing the best chips and people seem to be unfazed by the high valuations.”

If Nvidia hits the $2 trillion mark, it would achieve the milestone at the fastest pace ever by adding $1 trillion in just about nine months.

Soaring demand for Nvidia’s chips used by companies rushing to upgrade their AI offerings helped the Silicon Valley firm forecast a whopping 233% growth in first-quarter revenue, above market expectations of a 208% rise.

Gains in Nvidia lifted aspiring AI competitor Advanced Micro Devices 10%, while Super Micro Computer surged 20% and Arm Holdings rose 9.5%. The Philadelphia chip index added nearly 4.4%.

Nvidia, which controls about 80% of the high-end AI chip market, reported fourth-quarter revenue jump of more than threefold from a year ago to $22.10 billion.

Robust demand for its graphic processing units from massive datacenters in the middle of an AI upgrade has been bolstering its revenue growth for three quarters.

“The people who made the most money in the gold rush of the mid-1800s were the ones providing the tools to get the job done, not those hunting for the precious metal,” said Russ Mould, investment director at AJ Bell.

“Nvidia is effectively playing the same role today in this tech revolution.”

Analysts, however, worried that U.S. curbs on chips sales to China may be hurting its revenue growth. Sales in China amounted to about 9% of Nvidia’s fourth-quarter sales, down from 22% in the prior quarter.

The company trades at about 29 times its earnings expectations for the next 12 months compared to an industry median of 25.3, according to LSEG data. A year ago the valuation multiple was at 47.

Rapid increases in analysts’ earnings estimates imply that its forward earnings valuation has fallen even as its share price rises further.

“We’ve gotten well ahead of expectations and baked in a lot for the next three years,” said Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest.

At least 17 brokerages raised their price targets after results.

Rosenblatt Securities was the most bullish with a future price estimation implying Nvidia will hit $3 trillion market capitalization over the next 12 months.

Meanwhile, short sellers who raised their bearish bets on Nvidia’s rushed to the exit on Thursday, adding to the buying pressure, said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

With a 11.75% share gain, short sellers have lost $2.2 billion on paper, taking their declines to $6.84 billion so far this year, Dusaniwsky said.

Short-selling involves borrowing a stock to sell it in the expectation that the price will fall. But if the price rises, the seller are exposed to potentially unlimited losses.

(Reporting by Medha Singh and Amruta Khandekar in Bengaluru; Editing by Arun Koyyur)

By Guy Faulconbridge

MOSCOW (Reuters) -Russian President Vladimir Putin praised Joe Biden on Thursday for calling him a “crazy SOB”, saying with an ironic smile that the remark showed why the Kremlin felt Biden was a preferable future U.S. president to Donald Trump.

The U.S. president made the “crazy SOB” remark as part of a sentence about threats to the world – including “that guy Putin and others”, the risk of nuclear conflict and the existential threat to humanity from climate change.

When asked about the “crude” Biden remark by Russian state television, Putin smiled sarcastically and bit his lip before looking at the ground.

“We are ready to work with any president. But I believe that for us, Biden is a more preferable president for Russia, and judging by what he has just said, I am absolutely right,” Putin told state television, with a slight smile.

Putin, 71, said that his previous comments saying that Biden, 81, was Russia’s preferred candidate had triggered Biden’s “adequate reaction”.

“It’s not like he can say to me, ‘Volodya, thank you, well done, you’ve helped me a lot’,” Putin said. “You asked me which is better for us. I said it then that, and I still think I can repeat it: Biden.”

For Putin, the remarks show the difficulty of navigating the upcoming U.S. presidential election which is likely to bring to power either Biden, who has publicly insulted Putin, or Trump, 77, who has promised to end the war in Ukraine swiftly.

The war in Ukraine, the death of Russian opposition leader Alexei Navalny and U.S. assertions that Russia plans to put a nuclear weapon in space have led to the biggest crisis in relations between Russia and the West since the Cold War.

Top Russian and U.S. diplomats say they do not remember a time when relations between the world’s two biggest nuclear powers were worse, including during the 1962 Cuban Missile Crisis.

Putin casts the United States and its allies as a crumbling empire that wants to destroy Russia and steal its natural resources. The West casts Putin as a dictator and a killer, and Putin’s Russia as an enemy.

But never has a serving U.S. president previously used such insulting words in public to describe a serving Kremlin chief. U.S. President Ronald Reagan offended the Kremlin in 1983 by calling the Soviet Union an “evil empire”, though personal insults against leaders were rare in the Cold War.

‘COWBOY ACT’ OR ‘OLD GEEZER’?

The Kremlin had earlier said that Biden had debased the United States with his comment, casting the U.S. president’s remark as part of a failed “Hollywood cowboy” act.

“The use of such language against the head of another state by the president of the United States is unlikely to infringe on our president, President Putin,” Kremlin spokesman Dmitry Peskov told Reuters. “But it debases those who use such vocabulary.”

Peskov said the remark was “probably some kind of attempt to look like a Hollywood cowboy. But honestly I don’t think it’s possible.”

Others in Moscow were less restrained.

Putin ally Dmitry Medvedev, who served as president from 2008-2012, said the existential threat to the world came from “useless old geezers, like Biden himself”. Medvedev said Biden was “senile” and “ready to start a war with Russia”.

Russian Foreign Ministry spokeswoman Maria Zakharova said that the next time Biden used the phrase “crazy son of a bitch” he should “try to remember that Americans associate it best with his own offspring, Hunter Biden”.

Russian newspaper Moskovsky Komsomolets said “Biden insulted Putin” while Sergei Markov, a former Kremlin adviser, said the Biden remark shows that the West was intensifying its attempt to demonise Putin ahead of Russia’s March presidential election.

Biden said last week after prison officers announced Navalny’s death in a Russian penal colony that it was “a consequence of something that Putin and his thugs did.” Navalny had previously accused Putin of trying to kill him, an allegation the Kremlin denied.

Russian officials say the West rushed to blame Putin without waiting for evidence. The Kremlin says the West’s reaction to Navalny’s death is unacceptable and unjustified.

Biden said in a speech in Warsaw in 2022 that Putin “cannot remain in power”. The White House played down the remark, while hardliners in Russia saw it as evidence that the U.S. wanted to topple Putin.

In 2021, Biden said he thought Putin a killer. Putin said Biden phoned him later to give an explanation of why he used such words.

(Reporting by Guy Faulconbridge, Editing by Timothy Heritage, Hugh Lawson and Alex Richardson)

By Akash Sriram

(Reuters) – A global slowdown in electric-vehicle demand is rippling through the industry, costing jobs and leading to changes in strategic plans, layoffs and production cuts, suggesting pain in the near term could slow the transition away from gasoline-powered combustion engines.

On Thursday, German luxury carmaker Mercedes toned down expectations on EV demand and said it will update its gasoline-powered engine vehicle lineup well into the next decade.

Mercedes delayed its goal to go all-electric by 2030. Instead, it now says it will retain combustion engines in at least half of its vehicles until then. Previously, it had hedged by saying consumer demand would dictate how soon it went all-electric.

“High interest rates, moderate oil prices, and range anxiety all have conspired against EV demand. The enthusiasm of early adopters of EVs wasn’t representative of the longer-term and broader demand for these vehicles,” said Brian Jacobsen, chief economist at Annex Wealth Management, which does not own shares in any EV makers.

“We expected a reduction in demand and enthusiasm for the vehicles so we didn’t find the valuations compelling,” he added.

The pivot by Mercedes comes a day after EV startups Rivian and Lucid forecast 2024 production well below analysts’ expectations and Rivian cut its workforce by 10%. That news caused shares of Rivian and Lucid to tumble on Thursday by 27.5% and 19.5%, respectively.

The pain follows last year’s price war that drained margins and pressured many companies’ already money-losing EV operations.

“There is a host of macro-level challenges,” Rivian CEO RJ Scaringe told Reuters on Wednesday, adding that high interest rates and geopolitical risks were making consumers price-sensitive.

The situation was previously flagged by Ford, General Motors and market leader Tesla, where CEO Elon Musk’s warning in January of the market leader’s slowing pace of growth slashed $80 billion in market value in one day.

Prices for used EVs collapsed by 16.4% in January compared with a year ago, according to Manheim Used Vehicle Value index data. Even in China, the world’s largest auto market where demand for EVs has been strong, new-energy vehicle sales fell 38% in January, the first monthly drop since August 2023.

That drumbeat of bad news even has the administration of U.S. President Joe Biden set to propose a softening of limits on tailpipe emissions designed to get more Americans into EVs, sources said.

Earlier this month, Volvo Cars decided to halt investments in Polestar after the money-losing luxury EV offshoot brand missed a 2023 delivery target.

Some industry observers argue that the long-term picture of a transition to EVs remains in place despite any short-term road bumps.

“A slowdown in the growth rate from 45% to something more sustainable is not the disaster the press has been pushing. And interest rates affect all car sales, not just EVs,” said Vitaly Golomb, a Rivian investor and investment banker who focuses on mobility.

“The effect is more pronounced on more expensive vehicles of course and EVs still average higher price,” he added. “Perhaps (automakers) need to emphasize the stark difference in total cost of ownership.”

(Reporting by Akash Sriram in Bengaluru Writing by Ben Klayman; Editing by Matthew Lewis)

By Stephen Nellis and Max A. Cherney

(Reuters) -Intel said on Wednesday that Microsoft plans to use its services to manufacture a custom computing chip and that the company expects to beat an internal deadline of 2025 to overtake its biggest rival, Taiwan Semiconductor Manufacturing Co, in advanced chip manufacturing.

The American chipmaker also gave new details on how it plans to maintain a lead over TSMC into 2026 and beyond.

Intel made the disclosures at an event in San Jose, California, at the first technology conference for Intel Foundry, the contract manufacturing operation it established to compete with TSMC.

Intel says it plans to retake the mantle of making the world’s fastest chips from TSMC later this year with what it calls Intel 18A manufacturing technology and extend that lead into 2026 with new technology called Intel 14A.

It said Microsoft will use its 18A technology to make an undisclosed chip and that it now expects $15 billion of foundry orders, up from the $10 billion that the company had earlier told investors to expect.

TSMC said it had “no comment on the competitiveness of our advanced technologies” beyond what its CEO C.C. Wei said at the company’s last investor conference in January.

TSMC’s Taipei-listed stock has jumped almost 17% so far this year due to its dominance in producing the kinds of advanced chips used in AI applications by companies like Nvidia.

The news of 14A technology is the first time the Silicon Valley company has given details of its plans beyond 2025. That is the deadline Intel’s CEO, Pat Gelsinger, had set to regain the chipmaking crown when he took the reins three years ago.

For decades, Intel made chips only for itself and used its lead in manufacturing to create a cycle in which it made chips with industry-leading performance and charged a premium for them. Those margins, in turn, helped fund manufacturing advances. But when Intel lost its manufacturing lead, its chips became less competitive and margins slipped, sapping the source funding for a manufacturing rebound.

Now, Intel is counting on potentially billions of dollars in U.S. government subsidies and business from outside customers to help it get back on track.

It is hoping some customers will be enticed by its long history of operating cutting-edge factories on multiple continents, especially those with concerns about TSMC’s practice of keeping its most advanced factories clustered in Taiwan.

“It’s a sales pitch that’s resonating right now. People want that,” Stu Pann, the executive overseeing Intel Foundry, said of the company’s geographic diversity.

Intel says it has four “large” customers signed up for its 18A manufacturing technology but has yet to name them. It is not clear if Microsoft is among those financially important customers.

Intel said on Wednesday it was partnering with Arm Holdings to make it easier to make chips with Arm technologies in its factories. Intel also said it will work with the University of California, Berkeley, and the University of Michigan to allow students to access its 18A manufacturing technology.

Intel also has a special technology that analysts say will be useful for speeding up power-hungry artificial intelligence chips. Nvidia, the leader in the AI chip market, has said it is evaluating Intel’s manufacturing technology, but the two companies have not announced a deal.

Intel’s effort to lure in outside customers “is the key to the turnaround story,” said Ben Bajarin, chief executive of consulting firm Creative Strategies.

“Unfortunately, it’s an unanswered question, because this is a two-to-three-year journey before we have any inkling of knowing that this is working.”

(Reporting by Stephen Nellis and Max A. Cherney in San FranciscoAdditional reporting by Arsheeya Bajwa in Bengaluru and Ben Blanchard in TaipeiEditing by Himani Sarkar, Matthew Lewis and Tom Hogue)

By Chuck Mikolajczak

NEW YORK (Reuters) – The S&P 500 and Dow Jones industrials eked out small gains on Wednesday, while the Nasdaq closed lower for a third straight session as investors awaited the release of Nvidia’s earnings that could determine near-term momentum for equities.

After the closing bell, Nvidia shares surged 6% after it forecast fiscal first-quarter revenue above estimates on robust demand for its chips that dominate the market for artificial intelligence (AI).

During the session, Nvidia shares fell 2.85%, adding to the previous day’s decline of more than 4% for the chip designer.

Nvidia shares have soared nearly 40% this year, making it the biggest gainer on the S&P 500 after a leap of almost 240% in 2023. Analysts had cautioned that its lofty valuation could make the stock vulnerable to a sharp pullback if the company delivered anything short of a blowout report.

“It’s been driven by excitement and enthusiasm around AI and of course the AI darling in the room is Nvidia,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

“Markets are looking at Nvidia with a little bit of anxiety, maybe … we need to see a good report from the leader in the space and that leader is Nvidia.”

The S&P 500 climbed 0.13% to end the session at 4,981.80 points. The Nasdaq declined 0.32% to 15,580.87 points, while the Dow Jones Industrial Average rose 0.13% to 38,612.24 points.

Minutes from the Federal Reserve’s January meeting showed most policymakers were concerned about risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.

After the release of the minutes, traders of U.S. short-term interest-rate futures stuck to bets the Fed will begin cutting interest rates no earlier than June.

Despite the modest advance, nearly all of the 11 major S&P sectors advanced, with only the heavily weighted technology index lower with a decline of 0.76%. Energy shares led gainers with a rise of 1.86%.

Wall Street’s 2024 rally ran into turbulence last week after data hinted at sticky inflation, raising concerns the Fed would be in no hurry to cut interest rates.

The January inflation data complicates upcoming rate decisions, Richmond Fed president Thomas Barkin said.

Palo Alto Networks plunged 28.44% after the cybersecurity firm forecast third-quarter billings below analyst estimates.

Shares of other cybersecurity companies such as Fortinet, Zscaler and Crowdstrike Holdings were also weaker.

Amazon.com edged up, with the company set to join the Dow Jones Industrial Average effective next week, replacing Walgreens Boots Alliance <WBA.O>, which saw its shares decline.

Advancing issues were roughly even with decliners by on the NYSE. Declining issues outnumbered advancers for a 1.73-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new highs and no new lows; the Nasdaq recorded 47 new highs and 96 new lows.

Volume on U.S. exchanges was relatively light, with 10.5 billion shares traded, compared to an average of 11.7 billion shares over the previous 20 sessions.

(Reporting by Chuck Mikolajczak; Editing by David Gregorio)

By Chuck Mikolajczak

NEW YORK (Reuters) – The S&P 500 and Dow Jones industrials eked out small gains on Wednesday, while the Nasdaq closed lower for a third straight session as investors awaited the release of Nvidia’s earnings that could determine near-term momentum for equities.

After the closing bell, Nvidia shares surged 6% after it forecast fiscal first-quarter revenue above estimates on robust demand for its chips that dominate the market for artificial intelligence (AI).

During the session, Nvidia shares fell 2.85%, adding to the previous day’s decline of more than 4% for the chip designer.

Nvidia shares have soared nearly 40% this year, making it the biggest gainer on the S&P 500 after a leap of almost 240% in 2023. Analysts had cautioned that its lofty valuation could make the stock vulnerable to a sharp pullback if the company delivered anything short of a blowout report.

“It’s been driven by excitement and enthusiasm around AI and of course the AI darling in the room is Nvidia,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

“Markets are looking at Nvidia with a little bit of anxiety, maybe … we need to see a good report from the leader in the space and that leader is Nvidia.”

The S&P 500 climbed 0.13% to end the session at 4,981.80 points. The Nasdaq declined 0.32% to 15,580.87 points, while the Dow Jones Industrial Average rose 0.13% to 38,612.24 points.

Minutes from the Federal Reserve’s January meeting showed most policymakers were concerned about risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.

After the release of the minutes, traders of U.S. short-term interest-rate futures stuck to bets the Fed will begin cutting interest rates no earlier than June.

Despite the modest advance, nearly all of the 11 major S&P sectors advanced, with only the heavily weighted technology index lower with a decline of 0.76%. Energy shares led gainers with a rise of 1.86%.

Wall Street’s 2024 rally ran into turbulence last week after data hinted at sticky inflation, raising concerns the Fed would be in no hurry to cut interest rates.

The January inflation data complicates upcoming rate decisions, Richmond Fed president Thomas Barkin said.

Palo Alto Networks plunged 28.44% after the cybersecurity firm forecast third-quarter billings below analyst estimates.

Shares of other cybersecurity companies such as Fortinet, Zscaler and Crowdstrike Holdings were also weaker.

Amazon.com edged up, with the company set to join the Dow Jones Industrial Average effective next week, replacing Walgreens Boots Alliance <WBA.O>, which saw its shares decline.

Advancing issues were roughly even with decliners by on the NYSE. Declining issues outnumbered advancers for a 1.73-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new highs and no new lows; the Nasdaq recorded 47 new highs and 96 new lows.

Volume on U.S. exchanges was relatively light, with 10.5 billion shares traded, compared to an average of 11.7 billion shares over the previous 20 sessions.

(Reporting by Chuck Mikolajczak; Editing by David Gregorio)

By Chuck Mikolajczak

NEW YORK (Reuters) -U.S. stocks were lower on Wednesday, with each of the three major indexes on track for a third straight decline, as investors looked toward the release of Nvidia’s earnings that could determine the near-term momentum for equities.

Nvidia fell 2.2%, adding to the previous day’s decline of more than 4% decline. The chip designer’s quarterly earnings are due after the closing bell on Wednesday.

The company’s fourth-quarter revenue is expected to be more than triple from the previous quarter’s level on robust demand for its chips that dominate the market for artificial intelligence (AI).

Nvidia shares have soared nearly 40% this year, making it the best performer on the S&P 500 after a leap of almost 240% in 2023. Analysts have cautioned that its lofty valuation could be vulnerable to a sharp pullback if the company delivers anything short of a blowout report. This in turn could dampen enthusiasm over other AI-related stocks that have helped power the market rally off its October 2022 low.

“It’s been driven by excitement and enthusiasm around AI and of course the AI darling in the room is Nvidia,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

“Markets are looking at Nvidia with a little bit of anxiety, maybe, given that we have a market that’s done so well and maybe in order to keep it going short term we need to see a good report from the leader in the space and that leader is Nvidia.”

The Dow Jones Industrial Average was down 100.36 points, or 0.26%, at 38,463.44, the S&P 500 was down 16.91 points, or 0.34%, at 4,958.60, and the Nasdaq Composite was down 130.36 points, or 0.83%, at 15,550.43.

Minutes from the Federal Reserve’s January meeting showed the majority of policymakers were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.

After the release of the minutes, traders of U.S. short-term interest-rate futures stuck to bets the Fed will begin cutting interest rates no earlier than June.

Despite declines among stocks, only four of the 11 major S&P sectors were in the red, with heavily weighted technology stocks down 1.47%, while energy shares outperformed with gains of 1.74%.

The rally on Wall Street this year ran into turbulence last week after data hinted at sticky inflation, raising concerns that the Fed would be in no hurry to cut interest rates.

The January inflation data complicates upcoming rate decisions, Richmond Fed president Thomas Barkin said.

Palo Alto Networks plunged 28.2% after the cybersecurity firm forecast third-quarter billings below analyst estimates.

Shares of other cybersecurity companies such as Fortinet, Zscaler and Crowdstrike Holdings were also weaker.

Amazon.com edged up 0.2%, with the company set to join the Dow Jones Industrial Average effective next week, replacing Walgreens Boots Alliance. Shares of Walgreens lost 3.2%.

(Reporting by Chuck Mikolajczak; Editing by David Gregorio)