S&P 500, Nasdaq slump as Nvidia struggles ahead of earnings.
US stocks were mixed in choppy trading on Monday with tech leading the declines as investors weighed the imminent arrival of interest rate cuts and braced for a busy week dominated by Nvidia’s (NVDA) earnings report.
The Dow Jones Industrial Average (^DJI) erased earlier gains after briefly touching an intraday record. The S&P 500 (^GSPC) slipped 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) sank 1% as shares of chip heavyweight Nvidia dropped.
Tesla (TSLA) stock also fell more than 3%, contributing to losses on the Nasdaq and S&P 500.
Stocks are coming off weekly gains, notched after Chair Jerome Powell made it crystal clear the Fed is ready to pivot to lowering rates in September. The major indexes all gained more than 1% for last week.
Markets quickly moved to price in cuts totalling 1% by the end of 2024. But with only 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 whether a 0.5% cut is likely.
Now the focus is firmly on Nvidia earnings — the marquee event of the week — which will likely determine whether the market mood stays upbeat. If the chipmaker’s results on Wednesday fail to meet sky-high expectations, that could further dent the AI trade, which has powered stock gains, and, in turn, put the market’s rebound from August lows to the test.
Also ahead is a Friday update on Fed policymakers’ preferred inflation gauge, the PCE index print, which is likely to feed into rate-path calculations. Also on decks is a reading on the second quarter GDP on Thursday.
Meanwhile, oil prices jumped around 3% amid reports of production shutdowns in Libya and fears of escalating Mideast tensions after Israel and Hezbollah launched strikes. Global benchmark Brent crude futures (BZ=F) rose to $80.08 a barrel, while US benchmark WTI crude futures (CL=F) changed hands at $77.19 a barrel.