Key points:

  • All three major US indices closed in the red on Wednesday, May 22.
  • Nvidia shares rose 6% in after-hours trading.
  • The minutes of the Fed meeting showed that committee members still believe in a gradual decline in inflation, but they were disappointed by the latest economic data.

On Wednesday, all three major indices closed lower on American stock markets. Investors were reacting to the contents of the minutes of the latest Federal Reserve meeting.

However, Nvidia shares rose 6% in after-hours trading on an upbeat revenue outlook from the leading semiconductor maker. The positive trend extended to shares of other companies in this area.

The Dow Jones Industrial Average fell 201.95 points, or 0.51%, to close at 39,671.04. The S&P 500 lost 14.40 points, or 0.27%, to 5,307.01. The Nasdaq Composite Index fell 31.08 points, or 0.18%, to 16,801.54.

Nvidia’s report exceeded all expectations

Despite the decline in yesterday’s trading, Nvidia shares are up 90% year to date, after soaring nearly 240% in 2023.

In addition, Nvidia also rose at trading in Frankfurt after the chipmaker provided quarterly revenue forecast that exceeded investor expectations. Last year, the company’s market capitalization tripled on a wave of optimism associated with the development of artificial intelligence. Nvidia shares rose 6.6%, hitting a new record high.

The California-based company also announced a 10-to-1 stock split on June 7. It also increased its quarterly dividend by 150% to 1 cent per share after the split.

Fed disappointed by latest economic data

The US stock market showed volatility throughout most of the trading session, but eventually went down after the publication of the minutes of the Fed meeting. The minutes showed Fed members still believe inflation pressures are gradually easing, but their disappointment in recent economic performance has left investors uneasy.

It is worth noting that the Fed meeting in question took place on April 30 – May 1, that is, before the publication of June inflation data, which showed a slight slowdown in price growth.

The stock market’s rally to record highs this month was driven by several factors, including optimism about the prospects of artificial intelligence, a strong earnings season and hopes for a Fed rate cut.

The S&P 500 posted 47 new 52-week highs and six new lows, while the Nasdaq Composite posted 120 new highs and 109 lows.

Trading volume on US exchanges amounted to 12.86 billion shares, which is close to the average for the last 20 trading days (12.01 billion).