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Lowe's warns of margin pressure in Q2

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Eli Lilly's ( LLY ) diabetes drug tirzepatide gets approval in

China

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

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Indexes: Dow up 0.15%, S&P up 0.08%, Nasdaq flat

(Updated at 11:36 a.m. ET)

By Ankika Biswas and Lisa Pauline Mattackal

May 21 (Reuters) - The main U.S. indexes oscillated

within a tight range 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 was in no hurry to

ease interest rates.

Nvidia ( NVDA ), Wall Street's third-most valuable firm,

will report quarterly earnings on Wednesday in what is likely to

be a significant market trigger and a litmus test for the

success of the generative AI boom.

"For investors to drive Nvidia ( NVDA ) shares even higher, they're

going to be looking for some very aggressive forward numbers

that keeps them feeling that the stock could continue on its

upward climb," said Rick Meckler, partner at Cherry Lane

Investments.

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.

Investors also awaited minutes from the Fed's last policy

meeting, due on Wednesday, with two rate-setters on Tuesday

saying it was prudent to wait several more months to ensure

inflation really is back on a path to the 2% target before

commencing rate cuts.

Traders currently factor in about 44 basis points of rate

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

for November.

Consumer discretionary was the worst hit major S&P

500 sector index, dragged by a 3.1% drop in Lowe's 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%.

JPMorgan Chase ( JPM ) rose 1.3%, recovering from Monday's

4.5% slide. That, coupled with gains in other major big banks,

steered a 1.2% advance in the S&P 500 banks index.

The Dow fared better than its peers, boosted by

financials and a 1.5% rise in Microsoft ( MSFT ), a day after

the tech giant launched its new line of personal computers with

AI features.

At 11:36 a.m. ET, the Dow Jones Industrial Average

was up 60.90 points, or 0.15%, at 39,867.67, the S&P 500

was up 4.25 points, or 0.08%, at 5,312.38, and the Nasdaq

Composite was down 2.48 points, or 0.01%, at 16,792.40.

Palo Alto Networks ( PANW ) dropped 3.4% after its

fourth-quarter billings forecast disappointed investors.

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.

Eli Lilly ( LLY ) rose 2.5% after its diabetes drug

tirzepatide received approval from Chinese regulators.

Macy's was flat, erasing earlier gains driven by the

department store operator raising its annual profit forecast,

despite posting a bigger-than-expected drop in sales for the

first quarter.

Peloton Interactive ( PTON ) slumped 13.8% as the fitness

equipment maker was looking to refinance its debt to regain its

footing amid falling sales.

Declining issues outnumbered advancers for a 1.01-to-1

ratio on the NYSE and a 1.42-to-1 ratio on the Nasdaq.

The S&P index recorded 34 new 52-week highs and three new

lows, while the Nasdaq recorded 62 new highs and 67 new lows.