Today’s Market ActionMarkets Retreat from Tuesday’s Rally as Key Economic Catalysts Loom
Major U.S. stock indexes pulled back Wednesday midday as investors took a cautious stance ahead of two significant market events: Nvidia’s highly anticipated earnings report and the release of Federal Reserve meeting minutes. This pause follows Tuesday’s sharp rally that was fueled by easing trade tensions after President Trump delayed planned European Union tariffs.
As of midday Wednesday, May 28, 2025, the Dow Jones Industrial Average (DJI) was down triple digits, falling approximately 0.19% to 42,263.93.
Nvidia Earnings Take Center Stage
All eyes are on Nvidia (NVDA), which will release its fiscal first-quarter earnings after today’s market close. The AI chip giant is expected to report revenue of approximately $43.3 billion, representing a robust 66% year-over-year growth.
The slowdown in earnings growth is largely attributed to a $5.5 billion charge the company announced in April after the Trump administration restricted exports of its H20 AI chips to China.
“There’s kind of wait and see for Nvidia earnings tonight, which have become one of the big macro market movers both because of the leverage to the AI trade and the AI theme and also because of the linkages to global trade,” said Ross Mayfield, investment strategist at Baird.
Fed Minutes and Economic Uncertainty
The Federal Reserve will release minutes from its May 6-7 meeting at 2 p.m. EDT today. At that meeting, policymakers kept the benchmark interest rate unchanged at 4.25%-4.50% and maintained their wait-and-see approach amid economic uncertainties.
The minutes are expected to reveal officials grappling with uncertainty surrounding trade policies and their potential impact on inflation and employment. Richmond Fed President Tom Barkin recently described the current economic environment as “driving through fog,” highlighting the challenges in predicting how shifting global trade rules will affect the economy.
Notable Stock Movers
Several individual stocks made significant moves during midday trading:
– Unity Software (U) jumped 10% to $23.99, reaching its highest levels since early March, as options bulls targeted the stock with heavy call volume.
– Box Inc (BOX) surged 16.9% to $36.75, hitting fresh record highs following better-than-expected first-quarter results and a positive second-quarter outlook.
– Tempus AI Inc (TEM) fell 17.3% to $54.46 after reports that Spruce Point Capital Management has taken a short position in the stock.
– Capri Holdings (CPRI), owner of Michael Kors, declined 4.6% after reporting a wider-than-expected quarterly loss.
– Stellantis (STLA) made headlines as the automaker named its North American chief Antonio Filosa as CEO, as the company seeks to turn around performance and recover lost U.S. market share.
Market Outlook
Despite today’s pullback, U.S. equities remain on track for robust monthly gains. The S&P 500 and Nasdaq are poised for their best monthly performance since November 2023, boosted by easing trade concerns, upbeat earnings, and tame inflation data.
The S&P 500 is now approximately 4% below its record closing high reached in February, having recovered significantly from losses triggered by President Trump’s tariff announcements earlier this year.
As investors await Nvidia’s earnings and the Fed minutes, market participants remain cautious about potential volatility in the semiconductor sector, with defensive options contracts drawing heavy attention for the VanEck Semiconductor ETF (SMH).
The outcome of these two key events will likely set the tone for market direction in the coming days as traders continue to navigate uncertainties surrounding trade policies, interest rates, and the sustainability of the AI-driven tech rally.