Wall Street trades flat as Nvidia Earnings, Fed minutes keep investors cautious

European shares were broadly flat in early trade Wednesday, pausing after two days of gains.

Wall Street was largely steady on Wednesday as investors stayed on the sidelines ahead of chipmaker Nvidia’s earnings and the release of minutes from the US Federal Reserve’s May policy meeting.

The S&P 500 was marginally lower by 0.50% in mid-day trading, pulling back slightly after Tuesday’s powerful rebound that had seen the index rise 2%. The Nasdaq Composite was flat, led by modest declines in megacap tech stocks including Nvidia, which had rallied more than 40% from its April lows. The Dow Jones Industrial Average is down 0.20% after adding more than 700 points in the previous session.

With Nvidia’s quarterly results due after the bell, markets are bracing for a major catalyst. The options market is pricing in a post-earnings move of around 6% in either direction. While the AI-chip leader has repeatedly delivered blowout results over the past year, investors are now keen to assess the impact of potential US-China restrictions on chip sales and whether soaring demand for graphics processors is sustaining at the same pace.

"There's optimism about AI, but valuations are stretched. If Nvidia doesn't surprise on the upside, there's room for profit-taking," said a portfolio manager at a US-based tech fund.

Also read: Nvidia to have final say on strong earnings season for Big Tech

Meanwhile, the Federal Reserve’s May meeting minutes—due later in the session—are expected to offer further cues on the interest rate outlook. Despite signs of cooling inflation, recent Fed commentary has reinforced the view that rate cuts may be delayed until late 2025.

Among notable movers, Okta plunged over 11% after maintaining its annual guidance amid macro uncertainty. On the other hand, Abercrombie & Fitch surged more than 30% after beating earnings estimates, while Macy’s added over 1%.

The cautious tone in the US followed Tuesday’s gains, which were sparked by President Donald Trump’s decision to defer a 50% tariff on European Union imports until July. That move revived hopes of progress in US-EU trade talks and calmed fears of immediate escalation.