Stock Market Today: Stocks Struggle Ahead of Nvidia Earnings

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.

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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.

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