Wall Street’s main indices begin a new week with a mixed trend. While the Dow Jones and the S&P 500 rose, the Nasdaq turned red, pressured again by Nvidia. Investors await the publication, on Friday, of the personal consumption price index (PCE), which is the favorite variant of the Federal Reserve (Fed) to follow the evolution of prices.
Thus, the Dow Jones rose 0.28%, to 39,250.39 points. The biggest increases in the index were those of IBM (+2.03%), Chevron (+1.37%) and Coca-Cola (+0.89%). On the contrary, the biggest falls were those of Salesforce (-1.85%), Microsoft (-0.54%) and Intel (-0.51%).
The S&P 500 fell 0.09%, to 5,460.01; while the Nasdaq Composite fell 0.35%, to 17,625.91 integers.
This is how Wall Street opens
Eduardo Bolinches
The technology index was affected by the fall of Nvidia, of 1.7%, which extended its negative streak after having lost almost 7% in the previous two days. The red spread across almost the entire semiconductor sector: Arm Holdings and AMD fell 2.1% and 0.4%, respectively.
Chip manufacturers fell at the beginning of a week marked by the publication of the PCE, due to the influence that the indicator may have on United States monetary policy. In principle, both the annual growth rate of the general PCE and that of its core are expected to have moderated slightly in May.
If confirmed, the reduction “would be welcomed by the bond and stock markets, since it would serve to consolidate bets that the Fed will lower its interest rates twice in the remainder of the year and this despite the fact that the members of its Federal Open Market Committee (FOMC) have recently indicated that they only expect a reduction,” explain Link Securities analysts.
The market still expects the institution chaired by Jerome Powell to lower interest rates twice in 2024. It gives a 65% probability that the first cut will take place in September, according to LSEG data.
“Recent PCE readings have not always been in line with expectations…pressure from US data over the past two weeks has left markets expecting two cuts, while the Fed forecasts only one; this will be recalculated later of Friday’s report,” they point out from BNY Mellon, as reported by Reuters.
With this Monday’s increases, the Dow Jones and the S&P 500 were trying to extend the gains recorded last week. The advance of the first index was 1.45% – the largest since May – while that of the second was 0.6%. The Nasdaq’s rally was limited to 0.03%.
This week, in which attention is focused on the PCE, other references on the United States economy will also be published, such as consumer confidence prepared by the Conference Board, the Philadelphia Fed survey and the GDP data of the first quarter of the year. Likewise, FedEx, Carnival, Micron Technology and Walgreens will present their results.
Also on the radar of investors is the debate between the current president of the country and Democratic candidate for the elections, Joe Biden, and the former president and Republican candidate Donald Trump. The face to face will take place next Thursday in Atlanta at a time when both are very even in opinion polls.
