### U.S. Market Outlook
Major U.S. index futures are currently indicating a slightly lower opening on Wednesday, suggesting that stocks might retreat after a modest uptick in yesterday’s choppy trading session.
Investors are likely to capitalize on recent market gains ahead of the much-anticipated quarterly results from AI giant Nvidia (NVDA). Nvidia is set to release its fiscal first-quarter results after today's market close, with analysts forecasting significant earnings and revenue growth. However, market participants may remain cautious pending the release of the Federal Reserve's latest monetary policy meeting minutes this afternoon.
The minutes may influence interest rate outlooks, especially in light of recent comments from some Federal Reserve officials suggesting rates could stay higher for longer than previously expected. Although the probability of a rate cut by September remains high, it has dropped to 67.0% from nearly 90% last week, according to the CME Group's FedWatch Tool.
### Market Recap
Following Monday’s mixed performance, Tuesday saw stocks lacking clear direction for much of the trading day. Nevertheless, the S&P 500 and Nasdaq managed to close at new record highs. The major indices fluctuated across the unchanged line but trended upwards as the session concluded. The S&P 500 rose by 13.28 points (0.3%) to 5,321.41, the Nasdaq by 37.75 points (0.2%) to 16,832.62, and the Dow inched up by 66.22 points (0.2%) to 39,872.99.
This subdued market performance reflects traders stepping back to evaluate recent market strength. Renewed optimism that the Federal Reserve might lower interest rates has bolstered the market. Still, recent Fed comments have injected some uncertainty.
A quiet day on the U.S. economic calendar also saw traders holding off significant actions ahead of the Fed minutes release.
### Stock Movements
Peloton Interactive (PTON) shares plummeted following the company's announcement of a global refinancing, which includes a $275.0 million convertible senior notes offering due 2029.
AutoZone (AZO) saw a downturn despite reporting better-than-expected fiscal third-quarter earnings, as its revenues disappointed market expectations.
Conversely, shares of XPeng (XPEV) soared after the Chinese electric vehicle manufacturer reported fiscal first-quarter results that surpassed analysts' estimates on both top and bottom lines.
### Sector Performance
Reflecting the broader market’s tepid performance, most major sectors recorded only modest movements.
Airline stocks were notably weak, with the NYSE Arca Airline Index falling by 1.8%. Networking stocks also experienced declines, as seen in the 1.2% drop of the NYSE Arca Networking Index. This decline was influenced by a sharp fall in Palo Alto Networks (PANW) after the cybersecurity company guided fiscal fourth-quarter revenues and billings at the lower end of analyst estimates.
In contrast, tobacco and banking stocks exhibited some strength, pushing the NYSE Arca Tobacco Index up by 1.3% and the KBW Bank Index by 1.1%.
### Commodity and Currency Markets
Crude oil futures are down by $0.74, trading at $77.92 a barrel after a $0.64 drop to $78.66 a barrel on Tuesday. Meanwhile, gold is trading at $2,416.70 per ounce, down $9.20 from the previous session’s close of $2,425.90, following a $12.60 drop on Tuesday.
The U.S. dollar is currently trading at 156.57 yen, up from 156.17 yen at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0831, compared to yesterday's $1.0854.
### Asian Market Recap
Asian stocks ended mixed on Wednesday amid range-bound trading, as investors awaited Nvidia's earnings and the release of the Federal Reserve's meeting minutes. Diminished optimism regarding China's economic recovery and ongoing geopolitical tensions also contributed to cautious investor sentiment.
The dollar stabilized as more Fed officials warned that persistent inflation could necessitate prolonged higher interest rates. In Asian trading, gold prices edged down slightly, and oil prices fell by over 1% following industry data indicating increasing U.S. stockpiles.
China's Shanghai Composite Index fluctuated before closing marginally higher at 3,158.54, while Hong Kong’s Hang Seng Index decreased by 0.1%, settling at 19,195.60.Japanese markets experienced a significant decline driven by disappointing trade data. Japan recorded a larger-than-expected trade deficit for April, with export growth falling short of projections due to tepid demand from key markets like China.
The Nikkei 225 Index fell 0.9% to 38,617.10, while the broader Topix Index declined by 0.8% to 2,737.36. Notable movements included chip manufacturers Tokyo Electron and Advantest, both dropping around 1%. Conversely, tech conglomerate SoftBank Group rose 2.4% and Daikin Industries, a prominent air-conditioning manufacturer, gained 1.5%.
In Seoul, the Kospi Index ended marginally lower at 2,723.46 ahead of the release of the Federal Reserve minutes. Samsung Electronics decreased by 0.9%, whereas SK Hynix advanced 3%.
April marked the fifth consecutive month of rising producer prices in South Korea, driven largely by increased costs in services and industrial goods, according to central bank figures.
Australian markets closed slightly lower after a volatile trading session. Gains in mining and banking sectors were offset by losses in gold mining and energy stocks.
Meanwhile, New Zealand's S&P NZX-50 Index edged up 0.5% to 11,732.28. The Reserve Bank of New Zealand kept its cash rate steady at 5.5%, as anticipated, but raised its forecasted peak for interest rates.
### Europe
European stocks fell on Wednesday amid uncertainty about the interest rate outlook and caution ahead of Nvidia's earnings announcement.
Additionally, the U.K. reported consumer price inflation that slowed less than anticipated in April, complicating expectations for a potential rate cut in June. The Office for National Statistics indicated that inflation eased to its lowest point since July 2021, with consumer prices rising 2.3% year-on-year, slower than the 3.2% increase in March but still above the 2.1% forecast by economists.
Germany's DAX Index dipped by 0.3%, while both the U.K.'s FTSE 100 Index and France's CAC 40 Index fell by 0.7%.
Corporate news highlighted a drop in Dutch engineering firm Aalberts, which saw organic revenues fall by 2.5% in the first four months of 2024 year-on-year. The British RS Group, specializing in industrial and electrical products, slumped after reporting a 25% drop in underlying annual profits.
Conversely, Marks & Spencer surged, celebrating its highest profit in over ten years and announcing its first dividend since 2019. Swedish company Billerud advanced after canceling plans to convert the Escanaba paper mill to produce cartonboard. British Land also rose following the sale of its stake in Sheffield's Meadowhall shopping center for £360 million.
### U.S. Economic Reports
Chicago Federal Reserve President Austan Goolsbee is slated to deliver opening remarks at a hybrid Holding Company Symposium hosted by the Chicago Fed at 9:45 am ET.
At 10 am ET, the National Association of Realtors will release its report on April's existing home sales. Sales are expected to increase to an annual rate of 4.21 million, following a dip to 4.19 million in March.
The Energy Information Administration will publish its oil inventories report for the week ending May 17th at 10:30 am ET. Expectations are for a 3.1 million barrel decrease in crude oil inventories, following a 2.5 million barrel decline the previous week.
Additionally, at 1 pm ET, the Treasury Department will announce the results of a $16 billion auction for twenty-year bonds. The Federal Reserve will release the minutes from its April 30-May 1 monetary policy meeting at 2 pm ET.
### Stocks In Focus
Shares of Target (TGT) are plummeting in pre-market trading after the retailer's first-quarter earnings fell short of analyst expectations. Telehealth company Hims & Hers Health (HIMS) is also experiencing considerable pre-market weakness following a downgrade from Citi to Neutral from Buy.
Conversely, Analog Devices (ADI) shares are likely to gain traction after the semiconductor firm reported better-than-expected fiscal second-quarter results. E-commerce firm Shopify (SHOP) might also see upward movement after Goldman Sachs upgraded its stock rating to Buy from Neutral.
