US stocks slide with traders nervous ahead of Nvidia earnings

• US stocks fell Wednesday morning as traders eyed Nvidia's upcoming fourth-quarter earnings report.
• All three benchmark indexes fell while Nvidia shares tumbled more than 2% in early-morning trading.
• Wall Street is expecting the chipmaker to pull over $20 billion in revenue in its coming report.

US stocks slumped on Wednesday, with Nvidia stock leading the decline as traders sold the chipmaker ahead of its hotly anticipated fourth-quarter earnings report. All three benchmark indexes traded in the red.

Nvidia shares tumbled more than 2% in early-morning trading as investors grew nervous over the company's fourth-quarter earnings, a day after falling 4%. Wall Street analysts forecast that the Jensen Huang-led firm pulled in $20.4 billion in revenue last quarter — but there are worries the company may not be able to meet the astronomically high expectations already priced in by investors.

"The concern now is that the company may finally fail to beat market expectations," FCA senior market analyst David Morrison said in a note on Wednesday. "It certainly has some high hurdles to jump. If it does disappoint, it may also trigger a sell-off in other tech companies which have benefited from the excitement over generative AI," he added.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday: 

• S&P 500: 4,960.98, down 0.3%
• Dow Jones Industrial Average: 38,423.65, down 0.4% (137 points)
• Nasdaq Composite: 15,560.72, down 0.5%

Nvidia's upcoming results could make or break the market's rally, Fundstrat's head of research Tom Lee said in an interview with CNBC on Tuesday. 

"It's going to be telling us about how much firepower still exists in the market," Lee said. "If Nvidia has a great report and rallies, I think it's going to confirm we're not really at the top of the first half, 2024 market top. But there's an equal chance Nvidia has a great number and the stock sells off, and I think that's going to tell us perhaps a lot of the buying power is used up."

The firm is expected to report earnings after the closing bell on Wednesday. 

In the meantime, investors are eyeing the release of the Fed's minutes from its January policy meeting, which could give more guidance on the path of rate cuts this year. Markets are still pricing in ambitious rate cuts by the end of 2024, with 33% odds priced in that central bankers could slash interest rates by a full basis-point, according to the CME FedWatch tool.

Here's what else is going on today: 

• Here's what Wall Street is expecting from Nvidia's fourth-quarter earnings report.
• Hot, demand-driven inflation is actually a positive for stocks, according to UBS.
• This is why the stock market's bubble is like anything we've seen before.

In commodities, bonds, and crypto: 

• West Texas Intermediate crude oil fell 0.31% to $76.80 a barrel. Brent crude, the international benchmark, dropped 0.34% to $82.06 a barrel. 
• Gold climbed 0.27% to $2,029.49 per ounce. 
• The 10-year Treasury yield dropped one basis point to 4.26%.
• Bitcoin tumbled 2.47% to $51,004.