U.S. #stock index futures declined in Sunday evening trading, cooling off after a rally on #Wall #Street as remarks from #Federal Reserve officials solidified expectations for a September interest rate cut.
However, caution set in ahead of a crucial week, with #significant focus on earnings from #NVIDIA Corporation (NASDAQ), set to be released after the close on Wednesday. Additionally, the PCE price index, the Fed’s preferred measure of inflation, is due later in the week.
By 19:45 ET (23:45 GMT), S&P 500 Futures had dropped 0.2% to 5,643.50 points, #Nasdaq 100 Futures fell 0.2% to 19,745.0 points, and #Dow #Jones Futures edged slightly lower to 41,251.0 points.
#Nvidia Earnings in the Spotlight as AI Rally Faces Scrutiny
#Nvidia is scheduled to report its earnings for the quarter ending in July on Wednesday, with investors closely watching to see if the company can sustain its impressive earnings growth, driven by the #surge in artificial intelligence demand.
The chipmaker’s earnings and forward guidance are expected to provide insights into the ongoing demand for AI #technology. This follows a series of mixed results from other tech giants, which have raised concerns about the sustainability of the AI-driven market rally over the past year. Companies like Alphabet Inc. (NASDAQ) and #Microsoft Corporation (NASDAQ) saw declines after releasing their second-quarter earnings.
#Nvidia, a leader in the production of advanced AI #chips, has more than doubled its market value over the past year, becoming one of the most valuable companies on #Wall Street. However, the company’s ability to maintain this momentum will be tested on Wednesday. Other #chipmakers, such as TSMC (NYSE) and ASML (NASDAQ), reported in July that they were still benefiting from AI demand, offering some positive signals for Nvidia.
PCE Inflation Data in Focus as September Rate Cut Speculation Grows
The PCE price index data, due on Friday, is also a key focus this week as it will likely influence the Fed’s decision on interest rates.
Fed Chair Jerome Powell’s comments on Friday reinforced expectations for a rate cut in September, though traders remain divided on whether the cut will be 25 or 50 basis points, according to CME Fedwatch. The upcoming PCE inflation reading will be crucial in shaping these expectations.
Dow, S&P 500 Near Record Highs
Optimism over potential rate cuts drove Wall Street indexes close to record highs on Friday. The S&P 500 jumped 1.2% to 5,634.61 points, the Dow Jones Industrial Average gained 1.1% to 41,175.08 points, and the NASDAQ Composite climbed 1.5% to 17,877.79 points.
While the Dow and the S&P 500 are approaching recent highs, the Nasdaq remains below its record peak from earlier this year. A combination of profit-taking and concerns about the durability of the AI rally weighed on tech stocks in July.
The anticipation of rate cuts has also led traders to rotate out of technology stocks and into more economically sensitive, value-oriented sectors.
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