On Monday, U.S. stocks saw mixed movements, with the Nasdaq Composite (^IXIC) achieving a record close, driven by a surge in Nvidia (NVDA) shares ahead of the chipmaker’s eagerly awaited earnings report later this week.
The S&P 500 (^GSPC) edged up by 0.1%, while the Dow Jones Industrial Average (^DJI) fell below 40,000, declining by 0.5% due to a significant drop in JPMorgan (JPM) shares. This decline follows the Dow’s record close last Friday.
Investor optimism about potential Federal Reserve interest rate cuts has been driving stock gains, despite cautious signals from Fed policymakers. Even one of Wall Street’s most bearish analysts has raised his S&P 500 forecast following recent record highs.
A crucial consideration for investors is whether this optimistic outlook is sustainable or prematurely optimistic concerning the Fed’s trajectory. A significant test will come on Wednesday with the release of minutes from the Fed’s May meeting, as noted by Yahoo Finance’s Josh Schafer.
On Monday, Fed Vice Chair Philip Jefferson and Fed Vice Chair of Supervision Michael Barr cited disappointing first-quarter inflation as a reason to maintain current interest rates, allowing more time for restrictive policies to take effect.
The market is eagerly awaiting Nvidia’s quarterly results on Wednesday, seen as a pivotal factor for the ongoing stock rally. Expectations for the AI chipmaker’s earnings and revenue are exceptionally high, anticipating growth of 400% and 240%, respectively. Investors are keen to see if Nvidia can meet these lofty expectations.
JPMorgan’s stock dropped over 4% following the bank’s investor day, where CEO Jamie Dimon hinted that his retirement might be sooner than Wall Street had previously expected.
Simultaneously, rising commodity prices are stoking fears of increased U.S. inflation. Copper prices on the London Metal Exchange surpassed $11,000 a ton for the first time, hitting an all-time high due to a looming supply shortage. Additionally, gold prices (GC=F) surged to an intraday record of approximately $2,450 an ounce.
