Nasdaq, Dow Jones, S&P 500 News: Futures Inch Higher; Nvidia’s Decline Sparks Caution
Nvidia’s Pullback Raises Caution
Nvidia, a major player in the market, experienced a notable decline last week, falling 4% following two consecutive drops exceeding 3%. This decline came shortly after Nvidia briefly surpassed Microsoft as the most valuable U.S. company. Chart analysts have identified bearish patterns in Nvidia’s recent trading, suggesting potential volatility ahead. While this pullback does not undermine Nvidia’s robust fundamentals, it highlights concerns over the rapid rise in its stock price.
Artificial Intelligence Boosts Market Despite Economic Concerns
The enthusiasm surrounding artificial intelligence has significantly bolstered the market this year, helping the S&P 500 climb nearly 15% year-to-date with 31 record closes. This optimism persists even as investors contend with changing expectations for rate cuts and a slowing economy. The S&P 500’s resilience is further underscored by its 377-day streak without a 2.05% sell-off, the longest since the financial crisis, according to FactSet data.
Treasurys Steady Ahead of Key Inflation Report
Treasurys remained stable as investors awaited Friday’s critical inflation report. With a summer rate cut from the Federal Reserve unlikely, attention is shifting to potential action in September. The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, is expected to show a decrease in the annual rate of price rises to 2.6% in May from 2.8% in April. Currently, traders are pricing in a 66% chance of a September rate cut, according to CME’s FedWatch tool.
Bitcoin Declines Amid Broader Market Movements
Bitcoin dropped more than 4% on Monday, extending its June losses to 9%. Despite this recent downturn, the cryptocurrency remains up over 44% for the year. Investors are closely watching the upcoming PCE data and several key earnings reports from companies like FedEx, Micron, Walgreens Boots Alliance, and Nike, which could provide further market direction.
Market Forecast
Looking ahead, the market’s short-term outlook remains cautiously optimistic. The S&P 500’s strong performance and resilience suggest potential for further gains, though volatility may increase, particularly in tech stocks like Nvidia. The upcoming PCE inflation data will be crucial in shaping expectations for future Federal Reserve actions, which could influence broader market trends. Traders should remain vigilant, balancing optimism with caution as economic indicators and corporate earnings reports unfold.