By Johann M Cherian and Noel Randewich
(Reuters) -The retreated from near-record highs on Monday, with AI heavyweight Nvidia (NASDAQ:) dipping ahead of its quarterly report this week, while investors awaited inflation data for clues about the path of interest-rate cuts by the Federal Reserve.
Nvidia dropped 2.6% ahead of its report on Wednesday in what is set to be the U.S. stock market’s most closely watched event of the week.
Some investors worried that anything short of a stellar forecast from Nvidia could shatter Wall Street’s rally in AI-related companies, including Microsoft (NASDAQ:), Alphabet (NASDAQ:) and Meta Platforms (NASDAQ:).
“Nvidia could disappoint. I think when you get to the point where the majority doesn’t even suspect that there could be a piece of bad news, that’s typically where you get it,” warned Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.
U.S.-listed shares of PDD Holdings tumbled 29% after the Temu-owner missed market expectations for second-quarter revenue.
The S&P 500 was down 0.53% at 5,604.90 points.
The Nasdaq declined 1.13% to 17,675.64 points, while the was down 0.04% at 41,160.67 points.
Of the 11 S&P 500 sector indexes, six declined, led lower by information technology, down 1.48%, followed by a 1.06% loss in consumer discretionary.
The energy sector index jumped 1% following reports of oil supply disruptions amid the geopolitical conflict in the Middle East lifted crude prices. [O/R]
Wall Street rallied on Friday, with the S&P 500 nearing record highs after Fed Chair Jerome Powell said “the time has come” to lower borrowing costs in the light of a diminishing upside risk to inflation and moderating labor demand.
Money markets suggest traders see a 70% chance of a 25 basis point interest rate cut and a 30% chance of a 50 basis point cut in September, according to the CME Group’s (NASDAQ:) FedWatch tool.
Friday’s highly anticipated Personal Consumption Expenditure data for July, the central bank’s preferred inflation gauge, could provide more insight into the policy easing trajectory.
Results from Dell (NYSE:), Salesforce (NYSE:), Dollar General (NYSE:) and Gap are on tap this week.
Boeing (NYSE:) slipped 0.4% after NASA picked SpaceX over the planemaker’s Starliner to return its astronauts from space next year.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.1-to-one ratio.
Across the U.S. stock market, declining stocks outnumbered rising ones by a 1.1-to-one ratio.
