New York Stock Market Slightly Lower Early Ahead of FOMC Minutes and Nvidia Earnings

Major indices on the U.S. New York Stock Exchange showed slight declines in early trading on the 21st (local time) ahead of the release of the Federal Open Market Committee (FOMC) minutes and Nvidia's earnings report. Weak earnings forecasts from retailers also dampened investor sentiment.

At 10:18 a.m. on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was down 0.20% from the previous close, trading around the 35,080 level. The large-cap-focused S&P 500 index was down 0.27% at 4,534, while the tech-heavy Nasdaq index fell 0.60% to 14,198.

Within the S&P 500, energy, technology, and consumer discretionary stocks were declining, while materials and healthcare stocks were rising. Following the news of former OpenAI CEO Sam Altman's joining, Microsoft (MS) shares, which hit an all-time high the previous day, were down about 1% from the previous close. Similarly, Nvidia, which also reached a record high, fell more than 1.7% ahead of its earnings announcement. Other semiconductor stocks such as Intel, AMD, and Qualcomm also declined by around 2%. Apparel retailer American Eagle plunged over 17% due to annual operating profit guidance falling short of expectations. Lowe's lowered its annual sales forecast and dropped nearly 2%, while Best Buy also fell more than 2% amid weak earnings.

[Image source=Reuters Yonhap News]

Investors are closely watching the FOMC minutes to be released this afternoon and corporate earnings ahead of the Thanksgiving holiday. With weak earnings and downward revisions in sales forecasts from retailers being confirmed, Nvidia, a leading AI stock, will release its earnings after the market closes today.

According to FactSet, Nvidia's third-quarter revenue is estimated at $16.19 billion, with earnings per share of $3.37. This represents a sharp increase compared to the same period last year ($5.93 billion, $0.58 per share). Wall Street is particularly focused on Nvidia's fourth-quarter earnings guidance. Previous strong guidance from Nvidia has directly contributed to its stock price gains. However, the impact of additional U.S. regulations on AI semiconductor chips targeting China remains a key concern.

The FOMC minutes will be released at 2 p.m. today. The Federal Reserve (Fed) had previously held the benchmark interest rate steady at 5.25-5.5% during the meeting held from October 31 to November 1. With recent inflation indicators showing signs of slowing, attention is focused on what specific discussions took place regarding future monetary policy moves.

As inflation indicators have shown clear easing, market expectations have grown that the Fed's rate hikes have ended and that rate cuts may begin next year. According to the CME FedWatch tool, as of this morning, the federal funds futures market fully prices in the Fed holding rates steady at 5.25-5.5% at the next meeting in December. It also fully expects rates to remain unchanged through January. The probability that the Fed will cut rates at least once (baby step basis) by May next year exceeds 60%.

Investors are also paying attention to the flood of OpenAI-related news since last Friday. Following the sudden dismissal of Sam Altman and his decision to join MS, employees have announced collective resignations, continuing the turmoil surrounding OpenAI. Major foreign media outlets reported yesterday that OpenAI's board is reconsidering Altman's dismissal and is requesting his return.

Additionally, this week includes the Thanksgiving holiday closure on the 23rd and early market close on the 24th. Typically, trading hours are shortened during the Thanksgiving week, leading to increased volatility. On the 24th, the U.S. November Manufacturing PMI will be released, and on the 26th, the Organization of the Petroleum Exporting Countries Plus (OPEC+) oil-producing countries meeting will take place.

In the New York bond market today, the benchmark 10-year U.S. Treasury yield fell to around 4.39%. The 2-year yield remained steady at about 4.87%. The dollar index, which measures the value of the U.S. dollar against six major currencies, dropped more than 0.1% to 103.3. During the session, the dollar index fell to 103.1, marking its lowest level since August.

European stock markets showed mixed performance. Germany's DAX index traded slightly higher. The UK's FTSE index and France's CAC index fell by 0.18% and 0.27%, respectively.