The S&P 500 closed lower on Monday, with Nvidia, a major player in the AI sector, seeing a decline before its quarterly report later in the week. Investors were also eagerly awaiting inflation data for indications on the potential direction of interest rate cuts by the Federal Reserve. The Nasdaq also experienced a dip, while the Dow Jones Industrial Average managed to finish slightly up. Nvidia’s stock dropped 2.25% prior to its upcoming report, which is anticipated to be a significant event for the U.S. stock market this week.
There are concerns among investors that anything less than an outstanding forecast from Nvidia could disrupt the market’s rally in AI-related companies such as Microsoft, Alphabet, and Meta Platforms. Jake Dollarhide, the chief executive of Longbow Asset Management, cautioned that there could be potential disappointment from Nvidia. He mentioned that when the majority is overly optimistic, there is often a higher chance of negative surprises.
U.S.-listed shares of PDD Holdings saw a significant drop of almost 29% after the company missed market expectations for second-quarter revenue. In addition, Tesla’s stock fell by 3.2% following Canada’s decision to impose a 100% tariff on imports of Chinese electric vehicles, in line with actions taken by the U.S. and European Union.
The S&P 500 ended the day down by 0.32% at 5,616.84 points, while the Nasdaq closed 0.85% lower at 17,725.77 points. However, the Dow Jones Industrial Average managed to eke out a slight gain of 0.16% to reach 41,240.52 points. Among the S&P 500 sector indexes, six experienced declines, with information technology leading the losses, followed by consumer discretionary. On the other hand, the energy sector saw a notable increase of 1.11% due to reports of oil supply disruptions amid geopolitical tensions in the Middle East.
Boeing’s stock slipped by 0.85% after NASA chose SpaceX over Boeing’s Starliner for the mission to return astronauts from space next year. The decision had an impact on Boeing’s share price and market sentiment.
Looking ahead, traders are anticipating results from companies such as Dell, Salesforce, Dollar General, and Gap later in the week. These reports will be closely watched for insights into various sectors of the economy and overall market performance.
Money markets are currently pricing in a 70% probability of a 25 basis point interest rate cut and a 30% chance of a 50 basis point cut by the Fed in September, according to the CME Group’s FedWatch tool. The market will also be closely monitoring the upcoming Personal Consumption Expenditure data for July, which is the central bank’s preferred inflation measure. This data will provide further guidance on the future trajectory of policy easing.
The U.S. stock market experienced a mixed day of trading, with certain sectors facing declines while others saw gains. Investors are closely monitoring key events and data releases that could influence market sentiment and future investment decisions.