Dow drops as Fed inflation concerns rise

U.S. stocks closed lower on Wednesday as investors reacted to the Federal Reserve’s May meeting minutes, which signaled ongoing inflation concerns. The Dow Jones Industrial Average dropped 201.95 points (0.51%) to 39,671.04, marking its worst session in May. The S&P 500 fell 0.27% to 5,307.01, while the Nasdaq Composite slipped 0.18% to 16,801.54. The Fed minutes indicated a lack of recent progress in reducing inflation, with some policymakers open to further rate hikes if necessary to reach the 2% inflation target.

Market focus also turned to Nvidia’s highly anticipated earnings report. The chipmaker’s stock declined 0.5% before the announcement, though analysts expected another robust quarter, with earnings per share and revenue projected to grow by 400% and 240%, respectively. Deutsche Bank strategist Henry Allen emphasized Nvidia’s significant influence on the broader market, noting that its previous earnings report in February triggered a 2% surge in the S&P 500. Investors are keen to see whether Nvidia’s results will sustain the ongoing tech rally, which has driven the Nasdaq Composite up nearly 12% year to date.

Target shares plunged 8% following weaker-than-expected earnings, as management pointed to declining discretionary spending. This drop fueled broader concerns about consumer spending trends and potential economic headwinds. Investors will closely monitor upcoming economic data and corporate earnings to assess the outlook for inflation, interest rates, and overall market momentum.

Source: CNBC