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Quiver Morning Wrap

Quiver Editor

The Nasdaq (QQQ) slipped on Monday, impacted by declines in Nvidia (NVDA) and other semiconductor stocks, as investors prepared for crucial inflation data expected later this week. Nvidia saw a 3% drop, extending its losses to nearly 13% over three sessions due to profit-taking in the AI sector. Other semiconductor companies, including Taiwan Semiconductor Manufacturing and Qualcomm (QCOM), also fell, contributing to a 1.3% decline in the chip stocks index. Despite the downturn in tech, the Dow (DIA) and S&P (SPY) managed slight gains, with the broader market showing mixed results.

The upcoming personal consumption expenditures (PCE) price index report, the Federal Reserve's preferred inflation gauge, is highly anticipated by investors. This report is expected to show a moderation in inflation, which could influence market expectations for future interest rate cuts. According to Kim Forrest of Bokeh Capital Partners, a lower-than-expected PCE could bolster the market, although the Fed remains cautious about signaling rate cuts too soon. Current market predictions include at least two rate cuts this year, with a significant chance of a cut in September.

Market Overview:
  • Nasdaq hit by declines in Nvidia and other chip stocks.
  • Investors await key PCE inflation data.
  • Mixed performance with Dow and S&P posting gains, Nasdaq down.
Key Points:
  • FedEx (FDX), Micron (MU), and Walgreens (WBA) to report earnings.
  • Annual Russell index reconstitution in focus.
  • Biden-Trump debate adds to political uncertainty.
Looking Ahead:
  • PCE inflation report is critical for market direction.
  • Investors anticipate potential rate cuts later this year.
  • Ongoing economic and political events to influence market trends.

In other market movements, Under Armour (UAA) dropped 1.4% after agreeing to a $434 million settlement for a class-action lawsuit, while RXO (RXO) surged 16.1% following its announcement to acquire UPS's Coyote Logistics unit. Affirm Holdings (AFRM) also rose by 7.5% after Goldman Sachs (GS) initiated coverage with a "buy" rating. Meanwhile, investors are also keeping an eye on FedEx, Micron Technology, and Walgreens Boots Alliance as they prepare to report quarterly earnings. The annual Russell index reconstitution and key economic data releases, including durable goods orders and jobless claims, are also on the agenda for the week.

At mid-morning trading, the Dow Jones Industrial Average was up by 0.59%, the S&P 500 by 0.14%, while the Nasdaq Composite was down by 0.21%. The mixed market movements reflect the ongoing uncertainty among investors as they navigate through various economic indicators and corporate developments. Additionally, the political landscape remains a focal point with President Joe Biden set to debate Donald Trump in Atlanta, as both candidates remain close in national opinion polls.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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