U.S. stocks were mixed in choppy trading on Monday, with technology leading the declines as investors assessed the imminent arrival of interest rate cuts and prepared for a busy week dominated by Nvidia’s (NVDA) earnings report.
The Dow Jones Industrial Average (^DJI) briefly hit fresh intraday highs before paring gains to hover above the equator. The S&P 500 (^GSPC) fell 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) fell 1% as shares of chip giant Nvidia Corp. fell.
Tesla (TSLA) stock also fell 3%, contributing to losses on the Nasdaq and S&P 500.
Stocks are headed lower after a weekly gain, after Federal Reserve Chairman Jerome Powell indicated the bank is ready to shift to cutting interest rates in September. All major indexes posted gains of more than 1% over the past week.
Markets have moved quickly to price in a total of 1% cuts by the end of 2024. But with just three Fed meetings left in the year — in September, November and December — and the August jobs report still to come, Wall Street is wondering when and if a 0.5% rate cut is likely.
Attention is now firmly focused on Nvidia’s earnings — the big story of the week — which will likely determine whether the market mood remains positive. If the chipmaker’s results on Wednesday fail to meet sky-high expectations, it could further hurt the AI trade that has fueled the stock’s gains — and put the market’s recovery from its August lows at risk.
Also on Friday is an update on the Fed’s preferred inflation measure, which will likely help determine the path of interest rates. On Thursday, we have the second-quarter GDP reading.
Meanwhile, oil prices jumped about 3% amid reports of production disruptions in Libya and concerns about rising tensions in the Middle East after Israel and Hezbollah launched attacks. Global benchmark Brent crude futures (BZ=F) rose to $80.08 a barrel, while U.S. West Texas Intermediate (CL=F) futures were trading at $77.19 a barrel.
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