Stock markets pull back ahead of Nvidia’s earnings

US and European stock markets retreated on Wednesday as investors anxiously awaited results from artificial intelligence giant Nvidia.

The dollar strengthened against rivals as US President-elect Donald Trump works to finalize his cabinet picks, the outlook for US interest rates and the prospect of an escalation in the war between Russia and Ukraine.

“One of the most anticipated days of the earnings season, if not the most, Nvidia’s earnings day, is finally here,” noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Shares in US chip behemoth Nvidia fell 1.7 percent at the start of trading. The company will announce its third quarter results after the US markets close.

Many investors see the company as a bellwether for the technology sector and demand for artificial intelligence, which has helped Wall Street to several record highs this year.

“It’s rare for a single stock to dominate the global financial space, but tonight’s earnings report from Nvidia seems like a defining moment for global financial markets,” said Kathleen Brooks, director of research at XTB.

“A stunning earnings report could energize the AI ​​trade and the entire US stock market rally, but a disappointing report could trigger a risk-off vote,” she added.

Shares of Target fell more than 20 percent in open trade after the retailer posted weak results and disappointing guidance.

Investors are treading cautiously this week amid uncertainty following Trump’s re-election and as he chooses his cabinet, with several Chinese vying for key positions raising concerns about another trade war between the economic superpowers.

On Tuesday, he named China hawk Howard Lutnick as commerce secretary, and Wall Street is awaiting news of his choice for chief financial officer.

Trump has promised to raise tariffs on imports, with China particularly in his sights, but observers warn that such a move – along with planned tax cuts – could reignite still stubborn inflation.

This has dampened hopes for more interest rate cuts next year from the US central bank.

The war in Ukraine has also broken back into traders’ minds this week.

Markets fell briefly on Tuesday after President Vladimir Putin signed a decree lowering the threshold for using nuclear weapons.

– Key figures around 1430 GMT –

New York – Dow: UP 0.1 percent to 43,321.99 points

New York – S&P 500: DOWN less than 0.1 percent to 5,913.58

New York – Nasdaq Composite: DOWN 0.2 percent to 18,957.80

London – FTSE 100: UP less than 0.1 percent to 8,103.82

The story continues