As investors return to trading after the Presidents’ Day long weekend on Tuesday, the major indices find themselves entrenched in red territory, reflecting lingering uncertainties and cautious sentiment in the market.
In early trading, the tech-heavy Nasdaq Composite led the decline, shedding approximately 0.4%. The broader S&P 500 and the blue-chip Dow Jones Industrial Average followed suit, dipping around 0.3% and 0.2%, respectively. This comes after a turbulent week that saw all three benchmarks closing lower.
As markets resume after the Presidents’ Day break, all eyes are on the earnings reports from retail giants Walmart and Home Depot. Home Depot’s shares faced pressure as the company hinted at sluggish demand amid persistent inflation concerns. Conversely, Walmart’s upbeat sales outlook and dividend increase boosted investor confidence, sending its shares higher.
The latest economic data has cast doubts on the likelihood of a “soft landing” for the economy, prompting a reevaluation of expectations for a spring interest-rate cut by the Federal Reserve.
Looking ahead, Wednesday’s earnings report from Nvidia holds significant importance, with the AI-focused chipmaker being a key player driving market gains. Any disappointment in its performance could potentially trigger a broader market pullback.
In corporate news, Discover Financial Services saw its shares surge over 10% following news of a $35 billion acquisition deal by Warren Buffett-backed Capital One. This move is expected to create the sixth-largest US bank by assets.
Meanwhile, investors are also keeping an eye on developments in China, where the central bank’s unprecedented cut to its key mortgage rate aims to address a worsening property crisis, adding to the overall cautious sentiment in the market.
As investors continue to navigate the day’s trading, the prevailing theme remains the major indices’ journey into red territory, reflecting ongoing concerns and uncertainties in the market. As the trading day unfolds, investors will continue to monitor earnings reports, economic indicators, and geopolitical developments for further insights into market direction.
