By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -Wall Street’s main indexes dropped on Wednesday, as continued escalation of Russia-Ukraine tensions worried investors, while megacap Nvidia (NASDAQ:) lost ground ahead of quarterly results.
Stocks dipped after a report Ukraine fired long-range British Storm Shadow missiles into Russian territory. That followed Ukraine launching U.S.-made ATACMS missiles into Russia on Tuesday, and Russia announcing it had lowered the threshold for nuclear action.
Wall Street’s “fear gauge” jumped to 18.79 before easing slightly, but it was still trading at its highest since the Nov. 5 U.S. presidential election.
“There’s been more missiles firing between Ukraine and Russia, and the market doesn’t know what to think of that … tensions are escalating, not descalating and that’s why you’re seeing the sell off in the markets,” said Dennis Dick, trader at Triple D Trading.
Meanwhile, AI leader Nvidia , which is scheduled to report results after the bell, dropped 0.8%, reversing modest premarket gains. The index heavyweight dragged the Information Technology sector, as well as the tech-heavy Nasdaq.
Target (NYSE:) plunged 20.7% after the retailer forecast holiday-quarter comparable sales and profit below Wall Street expectations following a third-quarter estimate miss.
It dragged down other retailers such as Dollar Tree (NASDAQ:) and Dollar General (NYSE:), which fell 3.4% and 4.9%, respectively.
Among other growth stocks, Tesla (NASDAQ:) lost 1.8% and Amazon.com (NASDAQ:) shed 1.7%.
The consumer discretionary and consumer staples indexes lost 1.1% and 0.9%, respectively.
But the spotlight remained on Nvidia, which has nearly tripled in value this year, accounting for about 20% of the ‘s returns over the last 12 months, according to BofA Global Research.
However, given the lofty earnings expectations, the company could struggle to impress investors. Options traders are primed for a nearly $300-billion swing in Nvidia’s market value after the results.
“While expectations for Nvidia are high heading into its latest earnings report, we expect the company to report another strong quarter and live up to these high expectations,” said Clark Bellin, chief investment officer, Bellwether Wealth.
At 10:55 a.m. the fell 40.15 points, or 0.09%, to 43,228.79, the S&P 500 lost 30.00 points, or 0.51%, to 5,886.98 and the lost 123.86 points, or 0.65%, to 18,863.61.
Cryptocurrency stocks ticked higher as bitcoin jumped above $94,000, with MicroStrategy and MARA Holdings up 14.6% and 13%, respectively.
Comments from Federal Reserve officials including Michelle Bowman and Susan Collins are expected through the day.
Traders have increased their bets on the U.S. central bank leaving interest rates unchanged at its December meeting in the wake of strong economic data and signs of persistent inflation. They see a 44.5% chance of a pause next month, according to CME’s FedWatch tool.
Fed Governor Lisa Cook said recent data suggests that more cuts are likely appropriate as disinflation is expected to continue.
Declining issues outnumbered advancers by a 1.85-to-1 ratio on the NYSE and a 1.38-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and nine new lows, while the Nasdaq Composite recorded 66 new highs and 107 new lows.
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