Nasdaq 100, Dow Jones, S&P 500 News: Nvidia Leads Tech Sector Higher

James Hyerczyk
Updated: May 20, 2024, 15:57 GMT+00:00

Key Points:

  • Nasdaq reaches record high on Monday, driven by semiconductor gains. Nvidia results and Fed minutes expected this week.
  • Investors await Nvidia's quarterly results and Fed minutes. Nvidia's stock rises 2.8%, Micron up 4%.
  • Deutsche Bank raises S&P 500 target to 5,500 points, citing strong corporate earnings. Potential 4% rise from last close.
Nvidia Chip

In this article:

Nasdaq Hits Record High Amid Earnings and Fed Minutes Anticipation

The Nasdaq reached a record high on Monday, driven by gains in the semiconductor sector. The market’s focus is on the upcoming quarterly results from Nvidia and the Federal Reserve’s policy meeting minutes, both scheduled for this week.

At 15:22 GMT, the blue chip Dow is trading 40045.97, up 42.38 or +0.11%. The benchmark S&P 500 Index is at 5320.28, up 17.01 or +0.11% and the tech-weighted Nasdaq-100 Index is trading 16778.06, up 92.09 or +0.55%.

Market Gains Supported by Earnings and Inflation Data

Strong corporate earnings and lower-than-expected inflation figures have fueled optimism for potential interest rate cuts this year. This positive sentiment has led to four consecutive weeks of gains for the three major U.S. indexes. Last week, the S&P 500 and Nasdaq both achieved all-time highs, while the Dow closed above the 40,000 mark for the first time.

Anticipation Builds for Nvidia’s Results and Fed Minutes

Investors are eagerly awaiting Nvidia’s quarterly results, due on Wednesday, to assess whether the AI chip leader can sustain its rapid growth. Nvidia’s stock rose 2.8% on Monday, with multiple brokerages raising their price targets. Additionally, Micron Technology saw a 4% increase after Morgan Stanley upgraded its rating. The performance of these tech stocks helped the information technology sector outperform other major S&P 500 sectors.

The Federal Reserve’s meeting minutes, also expected on Wednesday, will be scrutinized for insights on the timing of potential interest rate cuts. Comments from Fed officials, including Christopher Waller and Philip Jefferson, are anticipated to provide further clues.

Fed Officials Weigh In on Inflation and Rate Cuts

Atlanta Fed President Raphael Bostic emphasized the need for more time to ensure inflation is moving towards the 2% target. Meanwhile, Vice Chair for Supervision Michael Barr described the year’s inflation data as “disappointing.” Traders currently see a 76.2% chance of a 25-basis-point rate cut in September, according to the CME’s FedWatch Tool.

Deutsche Bank Adjusts S&P 500 Target Amid Earnings Strength

Deutsche Bank has increased its year-end target for the S&P 500 to 5,500 points, up from 5,100, citing robust corporate earnings. This new target suggests a potential 4% rise from the index’s last close.

Key Economic Data and Corporate Movements

This week will also feature key economic data, including weekly initial jobless claims, S&P Global flash PMI readings, and durable goods orders. In corporate news, Johnson Controls International surged 3% following reports of a significant investment by Elliott Investment Management. Norwegian Cruise Line saw a 6% increase after raising its annual profit forecast, with Carnival Corp also gaining 4%.

Market Forecast: Bullish Sentiment Continues

The market outlook remains bullish, driven by strong earnings reports and expectations of potential rate cuts. With tech stocks leading the way and key economic indicators due this week, investors will closely monitor upcoming developments to gauge the sustainability of the current rally.

Technical Analysis

Daily E-mini Nasdaq-100 Index

E-mini Nasdaq 100 Index futures are edging higher at the mid-session. The early price action suggests after a two-day setback after a two-day setback. Last Tuesday, the tech heavy index hit a record high at 18686.75. A trade through this level will reaffirm the uptrend. There is no target at this time.

On the downside, we could see some minor pressure if 18545.00 fails to hold. If this leads to increased pressure then it will put the 50-day moving average at 18145.68 on the radar. This indicator is controlling the intermediate trend.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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