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Palo Alto shares slump after results

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Nvidia ( NVDA ) falls ahead of results on Wednesday

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Lowe's rises after smaller-than-expected drop in Q1 sales

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Macy's rises on upbeat forecast

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Indexes: Dow up 0.07%, S&P down 0.07%, Nasdaq down 0.32%

(Updated at 9:45 ET)

By Ankika Biswas and Lisa Pauline Mattackal

May 21 (Reuters) - The tech-heavy Nasdaq fell on Tuesday

as investors grew cautious ahead of AI chip leader Nvidia's ( NVDA )

earnings this week and Federal Reserve officials emphasized the

central bank is in no hurry to ease interest rates.

Nvidia ( NVDA ) shares fell 1.3% ahead of its quarterly

earnings announcement on Wednesday that is likely to be a

significant market trigger and a litmus test for the success of

the generative AI boom.

Losses in chipmakers pushed the Philadelphia SE

Semiconductor index down 1.2%. Memory chip maker Micron

dropped 2.2% after raising its full-year capital

expenditure forecast.

Nasdaq eased off its record-high closing level hit

on Monday, while information technology stocks led

losses among the 11 S&P 500 sectors, down 0.5%.

"Because Monday was strong for Nasdaq, I'd respectfully say

today's a mean reversion day," said Louis Navellier, chief

investment officer at Navellier and Associates.

Data from options analytics firm Trade Alert showed Nvidia's ( NVDA )

options are primed for an 8.7% swing, or $200 billion in market

cap, in either direction by Friday.

Navellier said Nvidia ( NVDA ) shares were "priced for perfection",

but noted the volume of options trading on the stock meant "it's

going to be very interesting to see the aftermath".

Investors are also awaiting minutes from the Fed's last

policy meeting due on Wednesday.

Atlanta Fed Chair Raphael Bostic said the central bank needs

to be cautious before starting to ease monetary policy, while

fellow rate-setter Christopher Waller emphasized the need for

more inflation data before cutting rates.

Traders currently factor in about 43 basis points of rate

reductions this year, with a quarter-point cut fully priced in

for November.

"We continue to expect the Fed to deliver the first cut in

December... An earlier cut is possible, but it likely requires a

string of more favorable inflation prints and some softening in

labor market data," Deutsche Bank Research analysts said in a

note.

At 9:51 a.m. ET, the Dow Jones Industrial Average

was up 28.67 points, or 0.07%, at 39,835.44, the S&P 500

was down 3.95 points, or 0.07%, at 5,304.18, and the Nasdaq

Composite was down 53.51 points, or 0.32%, at 16,741.36.

Palo Alto Networks ( PANW ) dropped 5.1% after its

fourth-quarter billings forecast disappointed investors.

Lowe's Cos reversed premarket gains to fall 1.6%.

The retailer's quarterly sales slowed less than forecast.

Macy's gained 2.1% after the department store operator

raised its annual profit forecast, despite posting a

bigger-than-expected drop in sales for the first quarter.

Peloton Interactive ( PTON ) slumped 13.7% as the fitness

equipment maker was looking to refinance its debt to regain its

footing amid falling sales.

U.S.-listed shares of Li Auto lost 3.4% after the

Chinese firm postponed plans to launch pure electric SUV models

to next year.

Declining issues outnumbered advancers by a 1.13-to-1 ratio

on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.

The S&P index recorded 19 new 52-week highs and one new low,

while the Nasdaq recorded 26 new highs and 40 new lows.