On Monday, the Nasdaq and S&P 500 made a comeback, offsetting some losses as investors look forward to quarterly results from AI frontrunner Nvidia, while Tesla surged on the potential for beneficial policy shifts under the incoming Trump administration.
Nvidia is set to announce its third-quarter earnings on Wednesday, where stakeholders will evaluate chip demand and the longevity of the AI excitement that fueled a significant portion of this year’s market surge.
Here’s what to expect today in U.S. and global markets from Mike Dolan.
Wall Street is feeling somewhat battered following its worst week in a decade, which interrupted the post-election enthusiasm, as clarifications about interest rates and earnings begin to resurface amid the ongoing uncertainty regarding the actions of a new administration come January.
Stocks were jolted on Friday after a week marked by disappointing inflation metrics, unexpected retail performances, and Federal Reserve Chair Jerome Powell’s indecision regarding future easing.
There was caution surrounding Nvidia’s imminent earnings report on Wednesday – as this market powerhouse and AI indicator faces another challenge regarding its nearly 800% stock surge over the last year.
The chip maker, which contributed to 20% of the S&P 500’s gains over the past twelve months, is projected to account for close to 25% of its EPS growth in the third quarter, according to BofA Global Research. Nvidia’s stock fell 1.5% after a report indicated that its new AI chips were experiencing overheating issues in servers.
“Although Nvidia is the last of the Magnificent Seven to present its results, there’s been a nice expansion in earnings and interest,” remarked Carol Schleif, chief investment officer at BMO Family Office. “It will be significant, yet it doesn’t seem to carry the same sense of urgency as it did a quarter or two back.”
Energy stocks led the S&P with a rise of 1.02%, alongside consumer discretionary stocks, which also saw gains as Tesla leaped 4.9% following a Bloomberg report that indicated members of President-elect Donald Trump’s transition team were looking to relax U.S. regulations for autonomous vehicles.
CVS Health saw its shares increase by 5.8% after the health insurer announced the addition of four new board members in collaboration with Glenview Capital Management. Nonetheless, healthcare stocks dropped by 0.17%.
“I believe many specific sectors could face considerable volatility until we hear more details regarding Trump’s new appointments later this month,” Schleif noted.
Stock indexes have given up some of the substantial gains seen after Trump’s strong victory, yet Wall Street appears relatively stable as 2024 approaches.
Increasing anticipation that the Federal Reserve will reduce the pace of policy easing, combined with uncertainty regarding the repercussions of Trump’s cabinet selections, contributed to the S&P 500 and Nasdaq recording their most significant weekly declines in over two months last week.
As of 2 p.m. EST, the Dow Jones Industrial Average decreased by 110.90 points, or 0.26%, reaching 43,334.09, while the S&P 500 climbed 17.65 points, or 0.30%, to 5,888.19, and the Nasdaq Composite rose 94.14 points, or 0.50%, to 18,774.09.
With the crucial holiday shopping season about to begin, earnings reports from major retailers like Walmart, Lowe’s, and Target are anticipated this week to assess the robustness of U.S. consumer spending.
On the NYSE, advancing issues outnumbered decliners by a ratio of 1.83-to-1, and on the Nasdaq, the ratio was 1.03-to-1.
The S&P 500 recorded 26 new 52-week highs and 13 new lows, while the Nasdaq Composite noted 58 new highs and 231 new lows.
