The S&P 500 cut the bulk of its losses in a volatile session Wednesday, as Nvidia-led rally in tech stocks supported the broader market at a time when investors are growing concerned about tightening from the Federal Reserve.
The S&P 500 fell 0.1%, though had fallen by as much as 0.7% intraday. The Dow Jones Industrial Average slipped 0.45%, or 156 points, the Nasdaq was down 0.03%.
Nvidia (NASDAQ:NVDA) jumped 5% to led a climb in the chip stocks, and the broader tech sector after the chipmaker reported quarterly results that beat on both the top and bottom lines.
The better-than-expected results were driven "driven predominantly by datacenter […] in addition to strength in professional visualization, Wedbush said in a note as it reiterated its outperform rating on the stock with a $220 price target.
Cisco Systems (NASDAQ:CSCO), meanwhile, climbed more than 3% after reporting fiscal fourth quarter results that topped Wall Street estimates, underpinned by strong order growth amid growing demand for 5G, digital transformation cloud security.
In big tech, Facebook (NASDAQ:FB), was under pressure amid fresh legal troubles after the Federal Trade Commission refiled its antitrust case against the social media company.
The FTC alleges that Facebook resorted to an "illegal buy-or-bury" scheme to maintain its dominance after failing to develop innovative mobile features for its network. The trade watchdog is called for the break-up of the company.
"After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat,” said Holly Vedova, FTC Bureau of Competition Acting Director.
Apple (NASDAQ:AAPL), and Google-parent Alphabet (NASDAQ:GOOGL) were flat, while Microsoft (NASDAQ:MSFT was 1% higher.
Weakness in cyclical stocks including energy, materials, and financials kept gains in the broader market in check as investors fretted about the economic outlook as the Delta variant of the coronavirus is expected to slow growth.
Goldman Sachs (NYSE:GS) cut its outlook on third-quarter U.S. GDP to 5.5% from 8.5%, citing the impact of the Delta variant of coronavirus on the economy.
"The impact of the Delta variant on growth and inflation is proving to be somewhat larger than we expected," Goldman Sachs said.
The less robust forecast on the economic outlook comes as investors continue to digest the prospect of the tightening from the Federal Reserve by year-end.
The minutes form the Fed's July meeting showed most committee members believed the economy could be strong enough to meet the central bank's threshold to begin tapering its $120 billion monthly bond purchases.
"[M]ost participants noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year," the Fed's minutes showed.