Today’s News
The S&P 500 closed lower on Monday, weighed down by a drop in AI giant Nvidia ahead of its highly anticipated quarterly report this week. Investors are also awaiting key inflation data for more clues on the Federal Reserve’s interest rate cut plans.
Image Source: Bloomberg
The tech-heavy Nasdaq also dipped, while the Dow Jones Industrial Average managed to edge slightly higher, buoyed by gains of about 1% each in Caterpillar and American Express.
Image Source: Bloomberg
Nvidia dropped 2.25% ahead of its earnings report on Wednesday, which is expected to be the most closely watched event of the week in the U.S. stock market. Some investors are concerned that anything less than a stellar forecast from Nvidia could disrupt the rally in AI-related stocks, including Microsoft, Alphabet, and Meta Platforms.
“Nvidia could disappoint. I think when you get to the point where the majority doesn’t even suspect that there could be a piece of bad news, that’s typically where you get it,” warned Jake Dollarhide, CEO of Longbow Asset Management.
In other market movements, U.S.-listed shares of PDD Holdings plummeted nearly 29% after the Temu-owner missed market expectations for second-quarter revenue. Tesla also saw a 3.2% decline after Canada announced a 100% tariff on imports of Chinese electric vehicles, following the lead of the U.S. and European Union.
The S&P 500 declined 0.32% to close at 5,616.84 points, while the Nasdaq fell 0.85% to 17,725.77 points. The Dow Jones Industrial Average rose 0.16% to finish at 41,240.52 points.
Of the 11 S&P 500 sector indexes, six closed in the red, led by a 1.12% drop in information technology, followed by a 0.81% decline in consumer discretionary. However, the energy sector saw a 1.11% rise, boosted by reports of oil supply disruptions due to geopolitical tensions in the Middle East, which pushed up crude prices.
Boeing slipped 0.85% after NASA selected SpaceX over the planemaker’s Starliner to return its astronauts from space next year.
Last Friday, Wall Street rallied, with the S&P 500 nearing record highs following Fed Chair Jerome Powell’s remarks that “the time has come” to lower borrowing costs due to diminishing inflation risks and moderating labor demand.
Money markets indicate a 70% chance of a 25 basis point interest rate cut and a 30% chance of a 50 basis point cut in September, according to the CME Group’s FedWatch tool. Friday’s Personal Consumption Expenditure data for July, the Fed’s preferred inflation gauge, is expected to provide more insight into the policy easing trajectory.
This week, the market is also looking ahead to results from Dell, Salesforce, Dollar General, and Gap.
Trading volume on U.S. exchanges was relatively light, with 9.5 billion shares traded, compared to an average of 11.9 billion shares over the previous 20 sessions.
Other News
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As U.S. rate cuts near, investors monitor economic data to gauge whether the economy can achieve a soft landing while inflation eases. The market performance is hinging on this delicate balance.
BNY Mellon Fined USD 5M for Swap Reporting Failures
BNY Mellon agreed to pay a USD 5 million fine after the CFTC found the bank repeatedly failed to correctly report millions of swap transactions and will hire an independent consultant to review compliance.
Markets Waver as Investors Eye U.S. Rate Cuts
Global markets are on edge as investors weigh the potential impact of upcoming U.S. interest rate cuts, with fears of a recession keeping sentiment cautious, while Asian markets show mixed performance.
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