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Lowe's warns of margin pressure in Q2

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IBM ( IBM ) rises after it makes more AI models open-source

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Indexes up: Dow 0.06%, S&P up 0.13%, Nasdaq 0.11

(Updated at 2:06 p.m. ET/1806 GMT)

By Chuck Mikolajczak

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 ( NVDA ) drew

closer.

Nvidia ( NVDA ), 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 ( NVDA ) 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 ( NVDA ) 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.

The Dow Jones Industrial Average rose 22.35 points,

or 0.06%, to 39,829.12, the S&P 500 gained 7.00 points,

or 0.13%, to 5,315.13 and the Nasdaq Composite 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 were 1% lower as a flurry of quarterly

reports from the group start to wrap up the earnings season,

with Lowe's down 2.98% after the home improvement

company warned of operating margin pressure in the current

quarter.

Automotive parts retailer AutoZone ( AZO ) lost 3.4% after a

third-quarter sales miss. The S&P 500 consumer discretionary

distribution and retail index also dropped 1.1%.

Macy's 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 ) 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 ) 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.