S&P 500, Nasdaq decline as Nvidia leads tech retreat

On Tuesday, stocks experienced a decline as Nvidia led a broader tech decline ahead of the chipmaker’s earnings report. The Dow Jones Industrial Average dipped 107 points, or less than 0.9%, while the S&P 500 slipped 0.8%. The tech-heavy Nasdaq Composite lost 1.4%.

Shares of Nvidia fell about 6%, and investors have expressed concerns about its sky-high valuation. Amazon, Microsoft, and Meta each lost more than 1%. With technology trading at close to 30x forward estimates, it seems difficult for additional PE multiple expansion.

So far this year, the technology sector has added 5.2%, making it the third-highest gainer in the broader market. Nvidia has continued its blockbuster stretch of gains, adding more than 37% so far this year.

Financial stocks were also in view following the blockbuster announcement that Capital One Financial agreed to purchase Discover Financial Services in an all-stock deal worth $35.3 billion, which is expected to close in late 2024 or early 2025.

In separate deal news, Walmart announced it will acquire TV maker Vizio for $2.3 billion, or $11.50 a share, leading shares of Vizio to climb higher by about 15%. Walmart shares added more than 4% after the big-box retailer also beat quarterly earnings and revenue expectations, fueled by double-digit growth in the company’s global e-commerce sales.

Tuesday kicks off the shortened trading week after U.S. markets were closed Monday in observance of the birthday of George Washington. Nvidia led the broader tech decline during Tuesday’s trading session, with shares sliding 6% by mid-afternoon.

Super Micro Computer shed nearly 10% even after Rosenblatt issued a price target at a Street high. Walmart shares climbed more than 3% and notched a new all-time high Tuesday following the retailer’s earnings report.