US Markets Close Slightly Lower Ahead of Nvidia Earnings Amid Hot Inflation

The S&P 500 and Nasdaq posted small declines while the Dow held relatively steady, reflecting caution as the PCE and CPI prints came in above forecasts, raising questions about the persistence of inflationary pressures in a resilient economy.

This environment boosted Treasury yields and supported rate-hike probabilities, creating headwinds for growth stocks even as futures pointed to gains on Nvidia's anticipated strength.

Sectors tied to rate sensitivity, including technology and consumer discretionary, underperformed, while defensive areas showed relative resilience.

The muted session highlights how macro data can override earnings momentum in the short term, particularly with Nvidia representing a significant portion of index weighting.

Market participants will watch upcoming Fed speeches and labor market indicators for clues on policy trajectory, alongside any follow-through from Nvidia's results that could override inflation concerns.

This setup suggests a neutral-to-cautious stance for indices in the near term, with volatility likely around key data releases and central bank communications.