Stock Market Today: Stocks Close Lower After Fed Minutes

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published 16 August 2023

Stocks wavered between losses and gains Wednesday as investors sifted through the latest batch of retail earnings and looked ahead to the mid-afternoon release of the minutes from the Federal Reserve's July meeting.

On the earnings front, quarterly results from Target (TGT, +2.9%) led the headlines today. The discount retailer disclosed lower-than-anticipated second-quarter revenue of $24.8 billion, while same-store sales fell by a wider-than-expected margin. TGT also lowered its full-year forecast.

On the plus side, however, earnings of $1.80 per share came in above estimates, which CEO Brian Cornell called "meaningful," particularly amid the "softening sales trends" seen early in the quarter. Additionally, the company's inventory level was 17% below where it was in Q2 2022.

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"The key takeaway from the retailers is that the U.S. consumer is still healthy, maybe a little pickier and price sensitive, but still likely to continue spending well into Q3," says Edward Moya, senior market strategist at currency data provider OANDA.

Analysts eye more upside for Nvidia

Meanwhile, Nvidia (NVDA) fell 1.0% even as Raymond James analyst Srini Pajjuri reiterated a Strong Buy rating on the semiconductor stock and raised his price target to $500 from $450.

The company is on next week's earnings calendar, set to disclose its fiscal second quarter results after Wednesday's close. Pajjuri is anticipating a beat-and-raise report, which should create tailwinds for the stock. "We believe GPU demand is significantly outpacing supply on [the] AI spending boom despite mixed Cloud capital expenditure trends," the analyst says.

For what it's worth, the highest price target for the trillion-dollar tech stock is $1,000, according to S&P Global Market Intelligence, while the lowest is $211.67. This works out to an average price target of $516.59, which represents implied upside of 19% over the next 12 months or so.

Fed minutes in focus

However, it was the release of the July Fed meeting minutes that was the main event today. The minutes showed that "most survey respondents" expected the quarter-point rate hike in July "would be the last of this tightening cycle," although additional increases were possible. This is particularly notable given that participants "stressed that inflation remained unacceptably high."

Still, "the probability of avoiding a recession through 2024 grew noticeably," the minutes stated.

At the close, the Dow Jones Industrial Average was down 0.5% at 34,765, the S&P 500 was 0.8% lower at 4,404, and the Nasdaq Composite was off 1.2% at 13,474.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.