Stocks were slow to get off the mat Wednesday as market participants sifted through several earnings reports from major retailers and looked ahead to tonight's quarterly results from AI giant Nvidia (NVDA).
Not helping matters was a hawkish tone in the minutes from the Federal Reserve's May policy meeting, which kept pressure on stocks through the close.
Starting with today's earnings news. Target (TGT, -8.0%) captured most of the attention after its first-quarter earnings fell short of estimates. The retailer also posted its fourth straight quarter of declining same-store sales as consumers bought fewer home goods and hardlines (i.e., consumer electronics and toys).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, BofA Securities analyst Robert Ohmes maintained a Buy rating on the consumer discretionary stock after earnings.
"While near-term sales remain pressured, we believe TGT's focus on value positions it well for share gains going forward," Ohmes says. "Recently announced price investments, changes to the Target Circle 360 rewards program, and several new Owned Brand launches focused on value and entry-level price points should support an improving value perception."
TJX pops on strong earnings
Marshalls parent TJX (TJX) was another big post-earnings mover; its share price surged 3.5% after the off-price retailer's beat-and-raise quarter. The company's strong results were driven by impressive same-store sales growth in the U.S. across all its brands, including TJ Maxx and HomeGoods.
"TJX continues to thrive in a challenging retail environment, boasting strong same-store sales growth," says Shams Afzal, managing director and portfolio manager for Carnegie Investment Counsel. "The concept of 'treasure hunt' where consumers discover branded products at great value, remains quite appealing in the current environment."
Nvidia slips ahead of earnings
While retail earnings captured investors' attention today, most folks had one eye trained on Nvidia before its after-the-close announcement. The semiconductor stock fell 0.5% ahead of its first-quarter results but remains 92% higher this year.
If Nvidia "can continue their enviable, remarkable string of beating estimates, raising guidance, then beating the raised guidance next quarter, that means that the AI trade can and will proceed apace," says Steve Sosnick, chief strategist at Interactive Brokers. But if there is the slightest sign of weakness, "much more than that stock alone will suffer," he adds.
CFRA says 3M stock is now a Buy
As for the main indexes, the Nasdaq Composite fell 0.2% to 16,801 and the S&P 500 slipped 0.3% to 5,307. The Dow Jones Industrial Average shed 0.5% to 39,671 amid weakness in Dow (DOW, -2.2%) and Goldman Sachs (GS, -1.7%).
3M (MMM) was another one of the worst-performing Dow Jones stocks today, falling 1.6%. The Post-It maker is still up nearly 11% for the year to date after its recently announced dividend cut wasn't as bad as many feared.
The company's improving risk profile and cost-cutting measures prompted CFRA Research analyst Jonathan Sakraida to upgrade 3M stock on Tuesday to Buy from Hold.
"We see a meaningful turnaround being more achievable amid a more lean and nimble 3M," Sakraida wrote in a note. "We're encouraged by recent progress on margins as 3M focuses on improving profitability amid a mixed demand environment."
Fed members split on pace of balance-sheet runoff
On the economic front, the release of the minutes from the Federal Reserve's May meeting was the main event for investors today. Earlier this month, the central bank kept interest rates at a 23-year high and said it was reducing the pace at which it shrinks its portfolio of Treasury bonds by $35 billion a month.
"A few participants indicated that they could have supported a continuation of the current pace of balance sheet runoff at this time or a slightly higher redemption cap on Treasury securities than was decided upon," the minutes stated.
As for inflation, the minutes confirmed what market participants already know, that it remains "more persistent than previously expected." And as a result, "policy expectations [have] shifted materially" in response.
"Normally the Fed is more important than anything else in the market, but because they've taken themselves out of the conversation, it will now fall to Nvidia earnings this afternoon to dictate which way the market goes from here," says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Related content
- Is Investing In Gold Worth It? How Gold Prices Have Changed
- Is the Stock Market Open on Memorial Day in 2024?
- Will Amazon's Updated Alexa Include a Subscription? What To Know
-
How to Navigate Your Medicare Advantage Plan in a DisasterIf you're a Medicare Advantage member in an area that has been impacted by a disaster, you might be worried about access to care and medicine. Here's what you need to know.
-
Older Investors: Boost Your Savings and Retire EarlierThis one measure can help older investors retire up to two years earlier and potentially double their retirement savings.
-
I'm a Financial Adviser: This Is How You Could Be Leaving Six Figures in Social Security on the TableClaiming Social Security is about more than filing paperwork and expecting a check. When you do it and how you do it have huge financial implications that last the rest of your life.
-
The Big Pause: Why Are So Many Americans Afraid to Retire?While new research sheds light on Americans' growing reluctance to quit work in later life, can anything be done to help those with the retirement jitters?
-
Five Under-the-Radar Shifts Investors and Job Seekers Can't Afford to Ignore Under the OBBBBeyond the headlines: The new tax law's true impact for job seekers and investors lies in how it will transform industries and create opportunities in areas such as regional accounting, AI and outsourced business services.
-
5 Popular Investing Strategies You Should Really RethinkThere are plenty of popular sayings that help guide your investing strategies, but which ones work? We turned to the experts and historical data to find out.
-
I'm a Financial Professional: It's Time to Stop Planning Your Retirement Like It's 1995Today's retirement isn't the same as in your parents' day. You need to be prepared for a much longer time frame and make a plan with purpose in mind.
-
An Attorney's Guide to Your Evolving Estate Plan: Set-It-and-Forget-It Won't WorkWhen did you last review your will? Before kids? Before a big move? An update is essential, but regular reviews are even better. Here's why.
-
Nasdaq Ends the Week at a New High: Stock Market TodayThe S&P 500 came within a hair of a new high, while the Dow Jones Industrial Average still has yet to hit a fresh peak in 2025.
-
For a Richer Retirement, Follow These Five Golden RulesThese Golden Rules of Retirement Planning, developed by a financial pro with many years of experience, can help you build a plan that delivers increased income and liquid savings while also reducing risk.
