Stocks opened higher Wednesday but lost steam as the session wore on. All eyes today were on Nvidia (NVDA), with the chipmaker releasing its fiscal first-quarter results after the close. You can follow all the coverage in our Nvidia earnings live blog.
Wall Street was also tuned into the release of the minutes from the Federal Reserve's May meeting, hoping for clues as to when the central bank could resume its rate-cutting campaign.
Indeed, after lowering the federal funds rate by a full percentage point at the end of 2024, the central bank has held it steady in its last few meetings.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
Fed Chair Jerome Powell has said multiple times that the central bank is waiting for more clarity on President Donald Trump's tariff policy and that the U.S. economy is strong enough to allow for a wait-and-see approach to monetary policy.
This outlook was echoed in Wednesday afternoon's release of the Fed meeting minutes.
"Participants agreed that uncertainty about the economic outlook had increased further, making it appropriate to take a cautious approach until the net economic effects of the array of changes to government policies become clearer," the minutes stated.
And while Fed officials agreed that labor market conditions and the economy were in "solid" shape, inflation remains "somewhat elevated."
But the administration's tariffs, which were "significantly larger and broader" than the central bankers anticipated, created "unusually elevated" uncertainty to their economic outlooks.
The Fed minutes helped buoy the 2-year and 10-year Treasury yields, which ended the day at 3.992% and 4.473%, respectively.
As for the main indexes, the Dow Jones Industrial Average dropped 0.6% to 42,098, the S&P 500 fell 0.6% to 5,888, and the Nasdaq Composite gave back 0.5% to 19,100.
Abercrombie & Fitch pops after earnings
Abercrombie & Fitch (ANF) was one of the best stocks on Wednesday, surging 14.7% after the apparel retailer reported higher-than-expected fiscal first-quarter earnings of $1.59 per share on revenue of $1.1 billion.
The company also raised the top end of its full-year revenue forecast, now expecting growth of 3% to 6% – more than analysts are anticipating.
However, Abercrombie lowered its profit and operating margin outlooks due to the estimated impact of Trump's tariffs, which are expected to create a $50 million "cost impact."
Broadcom can rally another 20%, says one analyst
Broadcom (AVGO) added 1.6% on Wednesday after Melius Research analyst Ben Reitzes lifted his price target on what he calls a "must-own" chip stock to $283 from $198.
The new target price represents implied upside of nearly 20% to current levels and would be an impressive feat for a stock that's already gained more than 60% since its early April lows.
Broadcom currently has seven customers for its custom artificial intelligence (AI) chips, Reitzes says, which could translate into a serviceable addressable market of up to $210 billion by the end of this decade.
The analyst adds that the company's AI networking chips create a substantial opportunity and could see long-term annual revenue growth of 20%.
Reitzes also highlights Broadcom's $10 billion stock buyback program, which could boost shareholder returns.
AVGO is also one of Kiplinger's favorite dividend-paying stocks, having increased its payout for the past 11 years.
Broadcom will take its spot on the earnings calendar after the close next Thursday, June 5.
Related content
- Kiplinger's Economic Calendar for This Week (May 26-30)
- Can Stocks Picked by AI Beat the Market? 3 Stocks to Watch
- Hot Upcoming IPOs to Watch
-
7 Emotional Habits to Avoid If You Want Financial SuccessThe same traits that make people emotionally intelligent can also keep your money decisions on track.
-
Quiz: Test Your Knowledge of Retirement Accounts, Charitable Giving and TaxesQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the five phases of retirement planning, the OBBB's potential impact on charitable giving and why you should stop doing your own taxes.
-
The 'Nothing Ever Happens' Market: How Stocks React (Or Don't) to Geopolitical EventsGeopolitical events — terrorist acts, wars, or military intervention — can give stocks a jolt. But that doesn't mean your portfolio will take a hit in the long run.
-
I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps ItThe Great Wealth Transfer is well underway, yet too many families aren't ready. Here's how to bridge the generation gap that could threaten your legacy.
-
Want to Advance on the Job? Showing Some Courtesy and Appreciation Could HelpTwo business professors share their insights about the impact of digital communication on the social skills of some in Gen Z and the importance of good manners on the job.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
From Job Loss to Free Agent: A Financial Professional's Transition Playbook (and Pep Talk)The American workforce is in transition, and if you're among those affected, take heart. You have the skills, experience and smarts that companies need.
-
A Financial Planner's Top Five Items to Prioritize When Your Spouse Is IllDuring tough times, it's easy to overlook important financial details, but you'll be so much better off if you take care of these things right now.
-
An Expert Guide to Outsmarting Inflation: Don't Let It Restrict Your RetirementInflation is often underestimated when estimating retirement income, education funding or investment returns. These strategies can help preserve your purchasing power and reduce your financial anxiety.
-
Your 401(k) Options Just Got More Complicated: Here's What You Need to KnowPrivate equity, real estate and expanded annuities are now options, but they are more complex, less flexible and more expensive to own.
