The shares opened higher on Wednesday, but lost steam as the session wore them. All eyes today are at Nvidia (NVDA), with chipmakers releasing financial first quarter results after the end. You can follow all coverage of the NVIDIA revenue live blog.
Wall Street was also coordinated to release minutes from the Federal Reserve May meeting, hoping for clues as to when central banks could resume their rate-cutting campaigns.
Certainly, after cutting the federal funding rates all points at the end of 2024, the central bank stabilized it in its final few meetings.
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Federal Reserve Chairman Jerome Powell has said many times that the central bank has made it clearer about President Donald Trump’s tariff policy clearer and is strong enough to allow the US economy to make an on-the-scene approach to monetary policy.
This outlook was reflected in the release of the minutes of the Federal Reserve Meeting on Wednesday afternoon.
“It would be appropriate for participants to take a careful approach until the net economic outlook has been increased further and the net economic impact of the arrangement of government policy changes is clearer,” the minutes said.
And while Fed officials agreed that the labor market situation and the economy are “solid” shape, inflation remains “slightly rising.”
However, administration tariffs “significantly larger and wider” than central bankers expected have created uncertainty that “has been extraordinarily rising” in economic outlook.
The Fed helped support the Treasury yields for two and ten years, finishing the day at 3.992% and 4.473%, respectively.
As for the main index, the Dow Jones Industrial Arage fell 0.6% to 42,098, with the S&P 500 falling 0.6% to 5,888 people, and the NASDAQ Composite returned from 0.5% to 19,100.
Abercrombie & Fitch pops after revenue
Abercrombie & Fitch (ANF) was one of the best stocks on Wednesday, surged 14.7% after apparel retailers reported higher-than-expected first-quarter revenues of $1.59, $1.1 billion.
The company also raises its top annual revenue forecast, with growth currently expected from 3% to 6%. I hope analysts are predicting.
However, Abercrombie lowered its profit and operating profit outlook due to the estimated impact of Trump’s tariffs, which is expected to create a $50 million “cost impact.”
Broadcom (AVGO) added 1.6% on Wednesday after Melius research analyst Ben Reitzes raised its price target for what is called “essential” chip stocks from $198 to $283.
The new target price represents an implicit rise of nearly 20% from the current level, an impressive feat for the stock, which has been earning over 60% since early April.
Broadcom currently has seven customers of custom artificial intelligence (AI) chips, says Reitzes. This could be converted into a serviceable addressable market of up to $210 billion by the end of the decade.
Analysts add that the company’s AI networking chips could create significant opportunities and find long-term annual revenue growth of 20%.
Reitzes also highlights Broadcom’s $10 billion stock buyback program, which could increase shareholder returns.
Avgo is one of Kiplinger’s favorite dividend paying stocks, increasing payments over the past 11 years.
Broadcom will be on its revenue calendar after it closes on Thursday, June 5th.
