NEW YORK, May 21 (Reuters) - U.S. stocks held near the unchanged mark on Tuesday as investors digested the latest round of comments from Federal Reserve officials for insight on the timing of a rate cut and the quarterly earnings from Nvidia drew closer.
Nvidia (NVDA.O), opens new tab, Wall Street's third-largest firm by market capitalization, will report quarterly results after the closing bell on Wednesday in what is likely to be a significant market catalyst and will test whether the outsized rally in AI-related stocks can be sustained.
Nvidia's options are primed for an 8.7% swing, or $200 billion in market cap, in either direction by Friday, according to data from options analytics firm Trade Alert.
Investors also looked toward minutes from the Fed's most recent policy meeting, due on Wednesday, after multiple Fed officials on Tuesday reinforced the stance that it would be best for the central bank to exercise patience before starting to cut interest rates.
"Investors are sort of just sitting on their hands for today because there are two important things that will be coming out tomorrow, Fed minutes combined with Nvidia earnings, so I don't think people want to make any big bets ahead of that," said Sam Stovall, chief investment strategist of CFRA Research in New York.
He said the Fed was "still very much data-dependent and as a result, they're going to do what the data tells them to do and that's pretty much it, but Wall Street is going to continue to forecast, ourselves included, that the Fed will start to cut rates in September."
Markets are currently pricing in a 64.8% chance for a cut of at least 25 basis points at the central bank's September meeting, according to CME's FedWatch Tool, opens new tab.
The Dow Jones Industrial Average (.DJI), opens new tab rose 22.35 points, or 0.06%, to 39,829.12, the S&P 500 (.SPX), opens new tab gained 7.00 points, or 0.13%, to 5,315.13 and the Nasdaq Composite (.IXIC), opens new tab gained 18.94 points, or 0.11%, to 16,813.81.
The S&P 500 traded in a range of about 20 points on the session.
Retailers (.SPXRT), opens new tab were 1% lower as a flurry of quarterly reports from the group start to wrap up the earnings season, with Lowe's (LOW.N), opens new tab down 2.98% after the home improvement company warned of operating margin pressure in the current quarter.
Automotive parts retailer AutoZone (AZO.N), opens new tab lost 3.4% after a third-quarter sales miss. The S&P 500 consumer discretionary distribution and retail index (.SPXRT), opens new tab also dropped 1.1%.
Macy's (M.N), opens new tab gained 1.4% after the department store operator raised its annual profit forecast, despite posting a bigger-than-expected drop in sales for the first quarter.
JPMorgan Chase (JPM.N), opens new tab rose 1.4%, recovering from Monday's 4.5% drop, helping fuel a 1.19% climb in the S&P 500 banks index.
International Business Machines (IBM.N), opens new tab climbed 2.2% on plans to release a family of artificial intelligence models as open-source software and help Saudi Arabia train an AI system in Arabic.
Declining issues outnumbered advancers for a 1.23-to-1 ratio on the NYSE and a 1.43-to-1 ratio on the Nasdaq.
The S&P index recorded 42 new 52-week highs and six new lows, while the Nasdaq 107 new highs and 92 new lows.
Reporting by Chuck Mikolajczak in New York Editing by Matthew Lewis
