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STORY: The S&P 500 and Nasdaq closed lower on Monday, as AI heavyweight Nvidia dipped ahead of its quarterly report later in the week.
The Dow meanwhile ticked up modestly to close at a record high.
The S&P shed about three-tenths of a percent, and the Nasdaq lost more than eight-tenths of a percent.
Shares of Nvidia dropped two-and-a-quarter percent ahead of its earnings report Wednesday, the stock market’s most closely watched event of the week.
But Skylar Weinand, chief investment officer at Regan Capital, thinks Nvidia’s dip – and the broader pullback in equities – is normal given this year’s rally.
“Stock market has had a tremendous run year-to-date, upper teens, which is on pace for an annualized almost 30%-return for the S&P and the Nasdaq. So, yeah, it’s expected to see a little bit of a pullback here. You know, the long-term normal is 8 to 11%. So, we could see a pullback here, especially going into September, but, you know, we think Nvidia is going to have a good report here on Wednesday. And we think long term, the stock market is on pace to continue to return low doubles.”
But some investors worried that anything short of another stellar forecast from Nvidia could shatter Wall Street’s rally in AI-related companies, including Microsoft and Meta Platforms, shares of which closed lower on Monday.
Fellow Magnificent 7 member Tesla lost more than 3% after Canada said it would impose a 100% tariff on imports of Chinese electric vehicles, following the lead of the U.S. and European Union.
Among other movers, shares of Caterpillar and American Express rose to help lift the Dow.
Monday marked the first full trading day since Federal Reserve Chair Jerome Powell said on Friday that “the time has come” to start cutting interest rates.
To that end, investors will look to this Friday’s Personal Consumption Expenditure data for July, the central bank’s preferred inflation gauge.
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