Image source: Getty Images.

Stocks fell on Wednesday as both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) indexes stepped back from record highs with just two trading days left in the year.

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Data source: Yahoo! Finance.

Rising prices for oil and gold kept commodity exchange-traded funds popular in daily trading, as both the VelocityShares 3x Long Crude Oil ETN (NYSEMKT:UWT) and the Direxion Daily Gold Miners Bull 3X ETF (NYSEMKT:NUGT) gained 6%.

A few individual stocks stood out with large price swings, too, including NVIDIA (NASDAQ:NVDA) and Kate Spade (NYSE:KATE)

NVIDIA takes a step back

NVIDIA shares fell 6% on heavy trading volume as investors tried to catch their breath following the stock's huge rally. It had gained 7% in the previous session and is up 64% over just the last three months. Shareholders are growing optimistic that the chipmaker's lead in serving many hot technology markets, including virtual reality, self-driving cars, and artificial intelligence, will translate into market-beating profit growth in the coming years.

Image source: Getty Images.

Its latest operating performance fed that narrative, with sales soaring 54% as NVIDIA set a record gross profit margin of 59% of sales. "We had a breakout quarter," CEO Jen-Hsun Huang said while discussing the results in November. "Record revenue, record margins, and record earnings were driven by strength across all product lines," he continued.

A key risk for investors buying shares now is overpaying for all that optimism. That risk has only grown as NVIDIA's valuation spiked to nearly 40 times expected 2017 profit -- from as low as 10 times earlier in 2016. Wednesday's decline likely reflects nervousness on the part of some investors that NVIDIA will struggle to earn that premium. In any case, the stock's rally means shareholders can expect more volatility ahead.

Kate Spade explores a sale

Kate Spade shares jumped 23% to break back into positive territory for the year on news that it is considering selling itself. The retailer has signed on with an investment bank and is in the process of contacting potential buyers, The Wall Street Journal reported.

Image source: Getty Images.

Before Wednesday's jump, the stock had taken a beating in 2016 as operating results worsened. Comparable sales ticked lower last quarter and gross profit margin fell to 59% of sales from 61%. Kate Spade has had to rely on price cuts to keep inventory moving lately, which pinched its earnings power.

The rough selling trend apparently continued into the holiday season quarter where Kate Spade advertised Black Friday discounts as high as 70% on much of the merchandise in its outlet stores.

Along with many other mall-based retailers, it is struggling with lower customer traffic trends right now. CEO Craig Leavitt recently blamed a "challenging retail environment" for driving profit figures down, but noted that the company offset the losses by keeping a lid on costs. Expenses last quarter dove to 48% of sales from 58% in the prior-year period.

It isn't clear just how serious Kate Spade is about a potential buyout or whether any premium would clear the company's current pricing of almost $18 per share. In any case, investors can't count on an acquisition sending the stock higher. Shareholders should instead keep watching margin trends for signs that the company is finding traction in its latest apparel and accessory offerings.