The US stock market displayed mixed performance on Monday, with the Dow Jones Industrial Average reaching a new record high of 41,353.49 points, while tech stocks, particularly Nvidia, experienced a significant decline. The S&P 500 fell 0.30% to 5,617.69 points, and the Nasdaq Composite dropped 0.83% to 17,729.28.Investors are keenly focused on Nvidia’s upcoming earnings report, scheduled for Wednesday, which is expected to have a substantial impact on the market. Nvidia’s stock dipped 2.6% ahead of the announcement, reflecting investor nervousness about the potential outcomes. As Kim Forrest, chief investment officer at Bokeh Capital Partners, noted, ‘Nvidia’s on tap. People are taking a little money off the table, saying, well, we’ve earned some money’.The energy sector bucked the downward trend, jumping 1.7% following reports of oil supply disruptions amid geopolitical tensions in the Middle East. This surge in energy stocks helped offset some of the losses in the tech sector.Market sentiment continues to be influenced by expectations of potential interest rate cuts by the Federal Reserve. Traders are now pricing in a 70% chance of a 25 basis point rate cut and a 30% chance of a 50 basis point cut in September, according to the CME Group’s FedWatch tool. This shift in expectations follows Federal Reserve Chairman Jerome Powell’s recent comments suggesting that ‘the time has come’ to lower borrowing costs.Looking ahead, investors are eagerly awaiting key economic data releases later this week, including the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge. This data, along with Nvidia’s earnings report, is expected to provide crucial insights into the state of the economy and the tech sector, potentially shaping market direction in the coming weeks.
Key points
- The Dow Jones Industrial Average reached a new record high, while tech stocks, particularly Nvidia, declined.
- Nvidia’s upcoming earnings report on Wednesday is causing market volatility and investor anticipation.
- The energy sector saw gains due to oil supply disruptions in the Middle East.
- Traders are pricing in high chances of interest rate cuts by the Federal Reserve in September.
- Upcoming economic data, including the PCE Index, is expected to influence market direction.
Contradictions👾There are varying reports on the exact probabilities of rate cuts, with some sources citing different percentages for 25 and 50 basis point cuts.
