On Wednesday, Wall Street's main indexes experienced declines, with the Nasdaq taking the lead, as investors awaited Nvidia's earnings report. The focus was on whether the recent bull market rally, driven by AI chip firm Nvidia and other tech-related shares, could be sustained. This week, the three main indexes have fluctuated between small gains and losses, with the Dow hovering near a record high and the S&P 500 within 1% of its all-time peak. Nvidia's shares dropped by 2.5%, and options pricing indicated a potential 9.8% movement in the shares on Thursday following the earnings release, according to ORATS data. Disappointing results from Nvidia could negatively impact other megacaps and semiconductor stocks, which have been leading the 2024 rally due to the integration of artificial intelligence into corporate profits.

Investors are anxious about Nvidia's upcoming earnings, given the high expectations. "Since expectations have been so high, you sort of wonder how much better can it get," remarked Sam Stovall, chief investment strategist at CFRA Research. Other chip stocks, including Broadcom and Advanced Micro Devices, fell by 1.7% and 2.9%, respectively, with the Philadelphia SE Semiconductor index down 1.9%. Growth stocks generally declined, with Meta, Microsoft, and Alphabet all in the red. By mid-day, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite were all lower, with technology stocks leading the declines among the S&P 500 sectors. In contrast, bank stocks rose, with Wells Fargo and Bank of America gaining over 1% each.

Optimism remains high that the U.S. Federal Reserve will reduce interest rates in September, following Fed Chair Jerome Powell's recent support for policy adjustments. According to the CME Group's FedWatch Tool, the odds of a 25-basis point reduction are at 63.5%, while a 50-bps cut stands at 36.5%. The upcoming Personal Consumption Expenditure report for July is expected to offer further insights into the central bank's rate-cut trajectory. Super Micro Computer suffered a significant drop of 24.8% after announcing a delay in filing its annual report, following Hindenburg Research's disclosure of a short position in the company. Meanwhile, Warren Buffett's Berkshire Hathaway saw its market value surpass $1 trillion, with its class B shares rising by 0.8%.