S&P 500 Index: US Stocks Slip on Sticky Inflation Ahead of Nvidia Earnings After Close

PCE Stalls Stocks Before Nvidia

Stocks are lower Wednesday after the PCE report gave the market a mixed inflation read heading into Nvidia’s earnings after the close. Core PCE held where the street expected it. Headline inflation did not.

The bond market got both numbers and has not picked a direction. Nvidia reports into that uncertainty. Meta reversed a 5% premarket rally after the details of a $16.7 billion settlement started sinking in. Warsh at Jackson Hole Friday is still ahead.

At 15:21 GMT, the S&P 500 was down 0.01%. The Nasdaq Composite was down 0.21% and the Dow was down 0.24%.

The Rate Trade Is Still Alive After PCE

Headline PCE rose 0.2% in July. The yearly rate came in at 3.7%. Both readings ran 0.1% above expectations. Core PCE rose 0.2% for the month. Yearly core held at 3.3%. That matched the forecast.

Core did not give the Fed a fresh reason to tighten. Headline inflation, income and the broader price data did not give the Fed a reason to relax. The 30-year yield hit levels not seen in nearly 20 years last week. Two days of lower yields helped technology shares recover. The long end has not gone away.

The consumer side of the report was not soft enough to settle the rate question. The economy is still carrying enough strength to keep inflation risk in the conversation. Stocks wanted PCE to push the rate trade back. It did not.

That leaves growth shares dependent on earnings again.

Nvidia Reports After the Close With the AI Trade on the Line

Nvidia reports second-quarter earnings after the bell. The street expects $2.09 per share on $92.28 billion in revenue. The company is not reporting into a quiet tape.

Nvidia is the largest stock in the S&P 500 with a market value above $5 trillion. The chip group bounced Tuesday after a rough stretch. Wednesday is where traders find out whether they want to keep it.

The earnings number matters. The outlook matters more. Nvidia has to show that the largest customers are still committing money to AI infrastructure with borrowing costs elevated and the long bond above 5%. A routine quarter does not settle the debate. The stock is too important and the spending expectations are too large.

PCE left the rate trade unresolved. Nvidia has to carry the technology side of the market without help from a clean inflation result.

Meta’s Bouncing Back after Early Volatility

Meta jumped 5% in premarket after reaching a settlement with California and other state attorneys general. By midday the stock was down about 1%.

The company agreed to pay $16.7 billion to settle claims that Facebook and Instagram harmed young users. The proposed agreement requires changes to the apps. Daily usage limits and nighttime blocks for teenagers. Stronger age checks. Additional tools for parents and guardians.

The settlement removes trial risk. It also puts a large number and product changes in front of a company already spending heavily on AI. Nvidia is the capital-spending beneficiary. Meta is one of the companies writing the checks. The settlement adds another claim on cash at a time when the market is watching whether big tech can keep funding AI without cutting into margins.

The early jump was relief. The move lower was the market looking at the bill.

After finding resistance at the 50-day moving average at $592.67 and plunging to an intraday low at $561.88, Meta is back to testing the 50-day MA. This type of price action suggests there may be enough buyers to trigger a breakout rally into the main top at $612.43 and the 200-day moving average at $623.28.

Daily S&P 500 Index (SPX) Technical Analysis

The S&P 500 Index is trading sideways for a fourth straight session. The main trend is up, but the minor trend is down, which may explain the lack of momentum.

The index is currently trying to establish support at 7631.09, which is slightly above the former record high at 7620.90. If this area fails as support, prices could plunge into the short-term 50% level at 7565.31 and the 50-day moving average at 7552.73. The support cluster formed by these two indicators could draw some buyers.

On the upside, the nearest target is a short-term pivot at 7723.90. This price is both resistance and a potential trigger point for an acceleration to the upside, with 7816.70 the next target.

What to Watch

Core PCE stopped the selling. Headline PCE stopped the rally. Nvidia reports after the close and the market needs the AI spending story confirmed before it commits to the upside. Meta’s settlement reversal shows the biggest tech names are carrying more than one risk at a time. Warsh speaks Friday at Jackson Hole. His read on inflation and the long bond decides whether the rate trade tightens around growth stocks heading into September.

The S&P 500 has been sideways for four sessions and is trying to hold support above the former record high. The 50-day moving average is sitting below that level. Nvidia’s earnings and guidance set the tone for technology. Friday’s Jackson Hole speech sets the tone for rates. The market is waiting on both before it picks a direction.

More Information in our Economic Calendar.