WALL Street's main indexes were set for a muted open on Wednesday ahead of Nvidia's earnings report, with focus squarely on if the recent bull market rally that was led by the AI chip firm and other tech-related shares can be sustained.

The three main indexes have swung between small gains and losses this week, with the Dow hovering near record highs and the S&P 500 within 1% of an all-time high, as investors await Nvidia's results after the bell.

The chip designer's shares were flat in premarket trading. Options pricing shows traders anticipate a move of around 9.8% in Nvidia's shares on Thursday, a day after it reports earnings, data from analytics firm ORATS showed.

Any disappointment in Nvidia's results could hurt megacaps and other semiconductor stocks, which have led 2024's rally on the prospect of artificial intelligence integration boosting corporate profits.

"Investors are a little nervous about what they're going to see and hear from Nvidia... since expectations have been so high, you sort of wonder how much better can it get," said Sam Stovall, chief investment strategist at CFRA Research.

"The news itself will be driving not only Nvidia's shares, but the technology sector and the overall market."

Other chip stocks such as Qualcomm and Advanced Micro Devices edged lower, as did megacaps including Meta, Microsoft and Alphabet.

At 08:27 a.m. ET, Dow E-minis were down 31 points, or 0.07%, S&P 500 E-minis were down 4.25 points, or 0.08%, Nasdaq 100 E-minis were down 19.25 points, or 0.10%.

Optimism continued to prevail that the U.S. Federal Reserve will lower interest rates at its September meeting after Fed Chair Jerome Powell's support for imminent policy adjustment last week, that had sparked broad-based market gains.

Odds of a 25-basis point reduction currently stand at 65.5%, while those of a 50-bps cut are at 34.5%, according to the CME Group's FedWatch Tool.

The Personal Consumption Expenditure report for July, due on Friday, is expected to provide further insight into the pace and magnitude of the central bank's rate-cut trajectory.

Comments on the economic outlook from voting member and Atlanta Fed President Raphael Bostic, due later in the day, will also be closely watched.

SentinelOne raised its annual revenue forecast, sending the cybersecurity company's shares up 1.3%.

Nordstrom jumped 1.7% after the department-store chain reported second-quarter profit which topped estimates, while Foot Locker sank 7.9% after the athletic apparel retailer posted a bigger quarterly loss.

Bath & Body Works fell 4.9% after the retailer cut its annual sales forecast.

 - Reuters