The stock market saw mixed results in choppy trading on Monday, with tech stocks leading the declines as investors anticipate upcoming interest rate cuts and prepare for Nvidia’s earnings report.
The Dow Jones Industrial Average briefly touched new intraday records before settling near the flatline. The S&P 500 slipped 0.4%, while the Nasdaq Composite sank 1%, mainly due to chip heavyweight Nvidia’s decline. Tesla stock also fell 3%, contributing to losses on the Nasdaq and S&P 500.
After Chair Jerome Powell’s announcement that the Fed is ready to cut rates in September, the market quickly priced in cuts totaling 1% by the end of 2024. However, with limited Fed meetings left in the year and the August jobs report still pending, uncertainty remains about the timing and magnitude of the rate cuts.
The focus this week shifts to Nvidia’s earnings report, which could heavily influence market sentiment. A disappointing report could hinder the market’s recent rebound from August lows, especially since Nvidia has been a driving force in stock gains.
In addition to Nvidia’s earnings, investors are awaiting updates on the Fed’s preferred inflation gauge, the PCE index, and the second quarter GDP report later this week. These economic indicators will further shape rate-path calculations for the remainder of the year.
Meanwhile, oil prices surged around 3% due to production shutdowns in Libya and escalating tensions in the Middle East. Global benchmark Brent crude futures rose to $80.08 a barrel, while US benchmark WTI crude futures traded at $77.19 a barrel.
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