U.S. stocks dip, Nvidia jumps after close

STORY: U.S. stocks fell on Wednesday as investors digested minutes from the Federal Reserve's most recent policy meeting and ahead of strong quarterly results from AI chipmaker Nvidia after the close.

The Dow lost about half a percent, the S&P 500 shed more than a quarter-percent and the Nasdaq dipped nearly two-tenths of a percent.

AI heavyweight Nvidia, with arguably the quarter's most anticipated earnings report, forecast second-quarter revenue above estimates and announced a ten-for-one forward stock split, impressing investors who have already tripled the chipmaker's market value in the past year.

Its shares, which closed down almost half a percent, rose after the bell.

Wall Street's main indexes struggled for direction for most of the session but weakened after the Fed minutes.

While central bank officials said they still had faith that inflation would continue to ease, doubts emerged about whether the current level of interest rates was high enough to guarantee that outcome.

Alexander Morris, CEO of F/m Investments, said the Fed's annual target goal of 2% inflation could be tough to achieve.

"The short answer seems to be the Fed is not giving up on that target, but it's an arbitrary target based in some academic some practical research, but no fact or law in that sense. And if the Fed is unable to hit 2%, I would not be surprised to see if the goal posts move a bit closer to two and a half. Not quite as high as three, but somewhere in a '2-enough' range that the Fed can declare victory without having to really wage an all-out campaign against the labor market."

Markets are pricing in a 59% chance of the Fed cutting rates at its September meeting, down from more than 65% in the prior session, according to CME's FedWatch Tool.

Stocks on the move included chipmaker Analog Devices, which jumped more than 10% after forecasting third-quarter revenue above expectations.

Retailer Target tumbled 8% after its quarterly earnings and current-quarter forecast missed estimates.

And TJ Maxx parent TJX gained 3.5% after raising its annual profit forecast.