Tech stocks pull Wall Street lower, led by investor favorite Nvidia

Pedestrians pass the New York Stock Exchange on Tuesday, Feb. 20, 2024 in New York. (AP Photo/Peter Morgan)

NEW YORK — Technology stocks led Wall Street broadly lower on Tuesday as chipmaker Nvidia pulled back ahead of its highly anticipated earnings report this week.

The S&P 500 fell 30.06 points, or 0.6 percent to 4,975.51. It is coming off only its second losing week in the last 16. The losses pushed the benchmark index further below the record it set last week.

The Dow Jones Industrial Average fell 64.19 points, or 0.2 percent, to 38,563.80. The Nasdaq composite fell 144.87 points, or 0.9 percent, to 15,630.78.

Technology stocks were the biggest drag on the market, with chipmakers as a particularly heavy weight. Nvidia slumped 4.4 percent. It’s still the S&P 500’s biggest gainer so far this year, rising about 40 percent. Wall Street will be closely watching its latest earnings update on Wednesday for clues about its health and the broader tech sector’s potential in 2024.

Several big retailers reported their latest earnings on Tuesday, presenting a mixed bag of results. Walmart rose 3.2 percent after reporting stronger-than-expected results for its latest quarter and issuing sales forecasts that came in ahead of what Wall Street was expecting. It is also buying smart TV maker Vizio.

Home Depot beats forecast

Home improvement retailer Home Depot was mostly unchanged after a day of unsettled trading. It beat Wall Street’s earnings forecasts, but gave investors a disappointing profit forecast for the year.

The market fell last week after several pieces of economic data signaled that inflation remains stubbornly high. That stalled a rally that began in late October based on hopes that inflation would cool enough to allow the Federal Reserve to cut interest rates.

READ: Stocks fall, dollar and yields gain after hot US inflation data

“The narrative that drove us to these levels is very much being called into question,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

At this point, Wall Street is now looking for the first rate cut to come in June, months later than earlier anticipated. Investors have to wait until the end of February for another key update on inflation. That’s when the government will release its monthly report on personal consumption and expenses, the Fed’s preferred measure of inflation.

“The key question to answer now is whether inflation is bottoming out, and if it is, does it go sideways or back up,” Samana said.

Home sales data

Investors have a relatively light week of economic news. Data on home sales will be reported on Thursday. The housing market remains tight as demand for homes continues to outpace supply.

Mortgage rates remain high, though they have been easing from their most recent peak in late October, when the average rate on a 30-year mortgage hit 7.79 percent.

READ: Average long-term mortgage rates rise again, hit highest level in 4 weeks

Several companies will report earnings this week. Online crafts marketplace Etsy will report on Wednesday. TurboTax maker Intuit will report on Thursday, along with online travel company Booking Holdings.

More than 80 percent of companies in the S&P 500 have reported their latest results. Analysts polled by FactSet expect overall earnings growth of about 3.3 percent for the fourth quarter and are forecast earnings growth of about 3.6 percent for the current quarter.

Discover Financial Services soared 12.6 percent, the most in the S&P 500, after agreeing to be acquired by Capital One Financial for about $35 billion.

Bond yields fell. The yield on the 10-year Treasury slipped to 4.27 percent from 4.28 percent late Friday. The yield on the two-year Treasury fell to 4.61 percent from 4.65 percent.