Nasdaq 100, Dow Jones, S&P 500 News: Mixed with Nvidia, Chip Stocks Providing Support

Wall Street Mixed as Traders Eye Key Inflation Data

Wall Street’s main indexes showed mixed results on Tuesday as traders returned from a holiday-extended weekend. Attention is now focused on key inflation data due later this week, which could influence expectations for the Federal Reserve’s rate-cut path.

At 15:06 GMT, the Dow Jones Industrial Average is trading 38911.81, down 157.78 or -0.40%. The S&P 500 Index is at 5305.02, up 0.30 or +0.01% and the Nasdaq-100 Index is trading 16991.92, up 71.12 or +0.42%.

Record-Breaking Rally and Rate Cut Speculation

The possibility of interest-rate cuts by the Federal Reserve has driven Wall Street to record highs since late 2023. Both the Nasdaq and S&P 500 marked their fifth consecutive week of gains last Friday. However, expectations for the timing of these cuts have fluctuated, with persistent inflation keeping policymakers cautious. Traders are particularly interested in the upcoming U.S. core Personal Consumption Expenditures Price Index report for April, which is expected to remain steady.

Market Sentiment and Key Comments

Traders estimate a 51.2% chance of a rate cut occurring in September, according to the CME FedWatch Tool. Kim Forrest, chief investment officer at Bokeh Capital Partners, noted, “The Fed is still in play… real interest rates need to come down. Overall, inflation is trending down, and slowing inflation will give the Fed cover to lower rates.”

Sector Performance and Individual Stocks

The Nasdaq hit a new intraday record high, driven by a 4.5% rise in Nvidia and other chip stocks, with the Philadelphia Semiconductor Index up 1%. The Dow lagged, dragged down by the healthcare and financial sectors, with healthcare also leading losses in the S&P 500 subsector. Apple rose 0.9% after a significant surge in iPhone sales in China, while T-Mobile and United States Cellular saw gains following a $4.4 billion deal announcement.

Fed Perspectives and Market Moves

Minneapolis Fed President Neel Kashkari suggested the central bank should wait before cutting rates, and might even consider a hike if inflation does not decrease further. UBS Global Research raised its year-end target for the S&P 500 to 5,600, the highest among major brokerages.

Advancing Issues and New Highs

Advancing issues outnumbered decliners on both the NYSE and Nasdaq. The S&P index recorded 18 new 52-week highs and seven new lows, while the Nasdaq saw 66 new highs and 44 new lows.

Market Forecast

Despite mixed index performances, the aggressive gains in the Nasdaq indicate strong bullish sentiment among traders. The continued rally, particularly in tech stocks like Nvidia, suggests confidence in the market’s resilience and growth potential. Short-term, traders should monitor upcoming inflation data closely, as it will likely shape expectations for rate cuts and influence market movements. The potential for volatility remains high, but the Nasdaq’s performance highlights a robust risk appetite among investors.