Dow closes at record high while S&P 500, Nasdaq slide as tech lags

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The Dow Jones Industrial Average (^DJI) notched a record close on Monday while the opposite two major averages slid as investors weighed the approaching arrival of rate of interest cuts and braced for a busy week dominated by Nvidia’s (NVDA) earnings report.

The Dow Jones Industrial Average rose greater than 0.1% to shut at a recent high of 41,240.52. The S&P 500 (^GSPC) slipped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) sank roughly 0.8%.

Technology lagged in the course of the session as shares of AI chip giant Nvidia fell 2% together with semiconductor peer Broadcom (AVGO) and EV maker Tesla (TSLA).

Stocks are coming off weekly gains, notched after Chair Jerome Powell made it crystal clear the Fed is able to pivot to lowering rates in September. The main indexes all gained greater than 1% last week.

Markets quickly moved to price in cuts totaling 1% by the top of 2024. But with only three Fed meetings left within the yr — in September, November, and December — and the August jobs report still to come back, Wall Street is wondering when and whether a 0.5% cut is probably going.

Now, the main focus is firmly on Nvidia’s earnings report — the marquee event of the week — which is able to likely determine whether the market mood stays upbeat. If the chipmaker’s results on Wednesday fail to fulfill sky-high expectations, that would 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 prone to feed into rate-path calculations. Also on deck is a reading on 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) settled at $81.43 a barrel, while US benchmark WTI crude futures (CL=F) closed at $77.42 a barrel.

Live12 updates

  • Dow closes at record, S&P 500, Nasdaq lag as tech stocks retreat

    The Dow Jones Industrial Average (^DJI) closed at a record high on Monday while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) slipped as shares of Nvidia (NVDA) fell roughly 2% ahead of its highly anticipated quarterly results later this week.

    The Dow Jones Industrial Average rose 0.1% to shut at 41,240.52 as Materials (XLP), Utilities (XLU), and Energy (XLE) gained.

    Technology (XLK) stocks underperformed in the course of the session with Broadcom (AVGO) and EV maker Tesla (TSLA) falling greater than 3%, dragging on the Nasdaq and S&P 500.

    PDD Holdings (PDD), also generally known as Pinduoduo, the parent company of e-commerce platform Temu, tumbled 28% following the discharge of disappointing second quarter results.

    Stocks were coming off Friday gains after Fed Chair Jerome Powell indicated policymakers were able to pivot and cut at the subsequent FOMC meeting in September.

  • History shows aggressive Fed rate cuts won’t be a very good thing for stocks

    Now that Fed Chair Jerome Powell has opened the door for a rate-cutting cycle to start, economists have reasoned how deeply the Fed will cut in 2024 will largely rely on how the labor market holds up.

    If the August jobs report, due out on Sep. 6, confirms that labor market weakness within the July report can have been overstated, many economists argue the Fed will begin with a 25 basis point rate of interest cut.

    In other words, the Fed would not must slash rates due to persistent signs the economy is weakening. And to many strategists, this stays the important thing thing investors must be specializing in when fascinated by Federal Reserve cuts.

    If the Fed cuts since the economy needs help, it hasn’t been good for stocks. Research from Truist co-chief investment officer Keith Lerner sent to clients on Monday shows that the S&P 500 was not less than 11% higher a yr after the primary Fed rate of interest cut dating back to 1989, so long as the economy remained on solid footing.

    Nonetheless, when the US economy entered recession in the next 12 months, the S&P 500 fell by not less than 14% over the subsequent yr, per Lerner’s research.

    This provides a transparent read-through for today’s environment. If the Fed is forced to chop more aggressively due to a big downturn within the labor market, history says that won’t a welcome sign for the stock market.

  • Nvidia to report Q2 earnings Wednesday in major test for AI trade

    Nvidia (NVDA) stock fell greater than 2% on Monday as investors await the chip giant’s quarterly results set for Wednesday after the closing bell.

    Yahoo Finance’s Dan Howley reports:

    Nvidia’s earnings announcement — essentially the most anticipated results of the quarter — will send ripple effects throughout the tech sector as investors search for signs that the AI trade will proceed to dominate market conversations into the second half of the yr.

    Nvidia stock is up greater than 163% yr to this point and 60% within the last six months. Rival AMD’s (AMD) stock price is up 9% yr to this point and down some 14% over the past six months.

    Intel (INTC) shares have collapsed 57% for the reason that start of the yr and are down 53% over the past six months as the corporate continues to struggle amid its massive turnaround effort.

    Read more here.

  • Investors are betting the Powell pivot will relieve regional bank woes

    Yahoo Finance’s David Hollerith reports:

    A pivot from Federal Reserve Chair Jerome Powell has investors betting that US bank stocks are poised to maneuver higher as lower rates of interest are expected to offer much-needed relief to some beleaguered lenders.

    That wager sent an index tracking midsize regional banks (^KRX) up 5% Friday, the most important single-day advance for the index in all of 2024. It held those gains Monday.

    That considerable move got here after Powell gave markets the all-clear signal by saying “the time has come to regulate policy,” establishing the primary Fed cut in greater than 4 years.

    An index tracking the broader banking sector (^BKX) is now up greater than 18% on the yr, in keeping with the performance of the S&P 500 (^GSPC).

    Read more here.

  • Oil prices jump 3% on Middle East tensions, Libya production halt

    Oil prices jumped sharply on Monday amid a halt in Libyan oil production and heightened tensions within the Middle East.

    West Texas Intermediate (CL=F) rose as much as 3% to hover above $77 per barrel, while Brent (BZ=F), the international benchmark price, increased greater than 2% to trade above $80 per barrel.

    Over the weekend, Israel implemented an airstrike against Tehran-backed Hezbollah’s rocket launching stations in Lebanon, adding to fears of a broader conflict involving Iran breaking out within the region.

    “The rise in tensions could bring an Iranian military response which, if seen, could slow global oil movements,” Dennis Kissler, senior vice chairman at BOK Financial, wrote in a note to clients on Monday.

    Read more here.

  • Gold climbs amid geopolitical tensions, expected rate cut

    Gold prices neared record highs on Monday as investors flocked toward the valuable metal amid heightened geopolitical tensions and the expectation of a Fed rate cut in September.

    Gold futures (GC=F) for December delivery climbed above $2,552 per ounce.

    The valuable metal is up greater than 23% yr to this point, making it one in every of the best-performing commodities of the yr.

  • Tech stocks lag as Nvidia, Broadcom, Tesla fall

    Tech stocks lagged on Monday, dragging on the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC).

    Shares of Nvidia (NVDA) fell greater than 1.5% by 12:30 p.m. ET, though they were off their session lows. Semiconductor Broadcom (AVGO) dropped greater than 3% while EV maker Tesla (TSLA) also fell greater than 2%.

    Meanwhile, Materials (XLP), Utilities (XLU), and Energy (XLE) stocks gained, helping lift the Dow Jones Industrial Average (^DJI) higher.

    Tech lagged on Monday while Materials, Utilities and Energy stocks gained.

    Tech lagged on Monday while Materials, Utilities and Energy stocks gained.

  • McLaren CEO looks to follow Ferrari’s blueprint for fulfillment — but with ‘no arrogance’

    Yahoo Finance’s Pras Subramanian reports:

    CARMEL, Calif. — McLaren CEO Michael Leiters believes that the British luxury supercar maker can succeed very like Ferrari has — but in a somewhat different way.

    “We have now one element in our brand, and it’s belonging,” Leiters, who has been on the helm of McLaren for 2 years after eight years as Ferrari’s chief technology officer, said in an interview with Yahoo Finance during Monterey Automotive Week. “We wish to have people here. … We speak with everybody — no arrogance.”

    That might be read as a not-so-veiled swipe at Ferrari, on condition that the Italian luxury sports automobile manufacturer is notorious for secrecy, invite-only events, and only selling recent vehicles to current or favored customers.

    Read more here.

  • Dow jumps 200 points while Nasdaq falls, Nvidia declines 2%

    The markets diverged on Monday because the Dow Jones Industrial Average (^DJI) rose as much as over 200 points to the touch a fresh intraday record.

    The S&P 500 (^GSPC) erased earlier gains to fall 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) dropped greater than 1%, led by a fall in shares of Nvidia (NVDA).

    The AI chip heavyweight will report quarterly results this Wednesday after the market close.

    EV giant Tesla (TSLA) also fell greater than 3%, weighing on the S&P 500 and Nasdaq.

  • Dow gains 200 points, touches intraday record

    The Dow Jones Industrial Average (^DJI) rose greater than 200 points, or 0.5%, on Monday morning, touching a recent intraday record of 41,394.10.

    Energy and Materials led the gains on Monday. Meanwhile, Technology stocks lagged, with the tech-heavy Nasdaq Composite (^IXIC) slipping as much as 0.7% while the S&P 500 (^GSPC) fell barely.

  • S&P 500 inches toward record high

    The S&P 500 (^GSPC) rose 0.3% on Monday, inching closer to its July record highs. The index was lower than 0.5% away from its July 16 all-time record close of 5,667.20.

    The Dow Jones Industrial Average (^DJI) rose 0.3% on Monday. The tech-heavy Nasdaq Composite (^IXIC) drifted just above the flat line after opening barely lower.

  • Stocks open mixed as investors turn concentrate on Nvidia earnings this week

    Stocks traded mixed on Monday as investors turned their focus to a busy week spearheaded by Nvidia’s (NVDA) earnings report.

    The S&P 500 (^GSPC) rose roughly 0.1%, while the Dow Jones Industrial Average (^DJI) added roughly 0.2%. The tech-heavy Nasdaq Composite (^IXIC) slipped slightly below the flat line after the foremost indexes rallied on Friday.

    The main focus this week is firmly on Nvidia earnings. Lots is riding on those results for the reason that AI chip heavyweight has been a serious driver of the markets this yr. Nvidia stock was little modified on Monday morning following a 4.5% gain on Friday.

    Stocks neared fresh record highs on Friday after Fed Chair Jerome Powell made it crystal clear the central bank is able to pivot to lowering rates in September. The benchmark S&P 500 index is lower than 1% away from topping the all-time closing high set in July.

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