Stocks experienced a decline on Tuesday, with Nvidia leading a broader tech downturn ahead of the chipmaker’s upcoming earnings report. The Dow Jones Industrial Average saw a slight dip of 14 points, or less than 0.1%, while the S&P 500 slipped by 0.5%. The tech-heavy Nasdaq Composite took a bigger hit, losing 1.1%.
Nvidia’s shares plummeted by more than 5% as investors anticipated its earnings report scheduled for Wednesday after market close. Despite expectations of strong results from Nvidia, concerns lingered among investors regarding its high valuation. In addition to Nvidia, other tech giants like Amazon, Microsoft, and Meta also recorded losses of over 1%.
Sam Stovall, Chief Investment Strategist at CFRA Research, noted that the tech sector’s valuation of around 30x forward estimates appeared to be a limiting factor. This could make it challenging for further PE multiple expansion in the tech industry. Stovall emphasized the importance of waiting for better-than-anticipated earnings results to potentially improve estimates for 2024 and 2025.
Source (CNBC)
