The Dow Jones Industrial Average reached a new high of 41,420 but then retreated from the highs somewhat, though it was able to settle above the flat line. The S&P 500 ended the session shy of the record high by 20 points or 0.3% lower.
However, the Nasdaq fell by a wider 0.8%, as investors seemed intent on taking some profits after its September rebound from the August 5 sell-off.
Nasdaq’s Decline and Nvidia’s Impact
The Nasdaq dipped well ahead of a major report from chip-making giant Nvidia following Wednesday’s closing bell. Nvidia lost 2% over Monday’s session, potentially indicating how strong the AI-led trade will be now. Nvidia is a big part of the technology sector and often helps set the sentiment in that space.
Both institutional and retail investors eagerly monitor the upcoming Nvidia earnings report. This company has steadily led S&P returns with strong positioning in AI and semiconductors; therefore, any kind of disappointment on a quarterly basis would probably equate to volatility for all markets, generally, particularly with regard to technology.
Federal Reserve’s Rate Cut Expectations
Attention is focused on the upcoming policy meeting of the US Federal Reserve, set for September 17 and 18. The market is performing well. There is a building agreement that the Fed will lower interest rates; however, discussions are now centered around the extent of the potential decrease.
Traders will also be hungry to hear speeches from various Fed officials this week, most notably Mary Daly and Thomas Barkin, who continue to speak out. Daly has suggested that she would support small rate cuts to take some of the heat off the market. Barking is concerned about the risks of inflation. That said, he has also opined that a “.gradual decrease in rates is warranted as labour market continues to slow.
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Market Movers
Besides Nvidia, other companies like Nordstrom are set to announce their earnings soon. These updates may provide insights into how consumers are doing and their spending habits. Investors are keeping a close eye on activities such as company stock buybacks, fund movements, and trends in retail investments. According to Scott Rubner from Goldman Sachs, these factors could potentially lead to an increase in stock prices over the coming weeks.
Moreover, oil prices have risen, while the yield on year Treasury bonds has gone up by basis points, reaching 3.82%. This increase in prices is attributed to tensions in the Middle East following Israel’s strikes on Hezbollah positions in southern Lebanon and the eastern governments announcement regarding halted exports from Libya.
Conclusion
Throughout the week the trajectory of the market is expected to be swayed by Nvidia’s earnings announcement and the Federal Reserves anticipated policy decisions. Investors ought to prepare for fluctuations notably in the technology sector as significant events unfold.
ALSO READ: Nvidia Slump Sends Nasdaq 100 Down 1.5% Ahead of Key Earnings Report
People May Ask
Why was the Nasdaq down pre-Nvidia earnings?
The Nasdaq was down as investors took a bit of profit and waited for Nvidia’s earnings, which are expected to have a pretty significant impact on market sentiment.
On the same day, how did the Dow Jones fare?
The Dow Jones reached a fresh high of 41,420, pulled back from those highs, but still managed to close above the flat line.
How might the market be affected by the Nvidia earnings?
The earnings report of Nvidia should cause market volatility at least in the tech sector as expectations are met or beat, or both.
What is expected from the next Federal Reserve meeting?
The market expects a rate cut from the Federal Reserve during its September 17-18 meeting, though the size of the cut is a subject of debate.
How did the price of oil react to the current conditions in the market?
Oil prices, for their part, have gone up in the wake of geopolitical tensions in the Middle East, further influencing market dynamics.
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