Wall Street’s benchmark S&P 500 (SP500) index on Tuesday closed within striking distance of its all-time intraday peak, but moves were small, and the gauge spent most of the day fluctuating as cautious investors await Nvidia’s (NVDA) quarterly report this week.
The tech behemoth has been an instrumental driver of the bull run in U.S. stocks, and its financial performance will once again be closely scrutinized to see whether the company’s massive valuation is justified.
Dan Ives, the Wedbush analyst who is known on Wall Street for being one of the more bullish voices for technology stocks, said that Nvidia’s (NVDA) numbers mark the most important week of the year for markets.
The S&P (SP500) finished +0.16% at 5,625.80 points, while the tech-heavy Nasdaq Composite (COMP:IND) concluded +0.16% at 17,754.82 points. The Dow (DJI) settled +0.02% at 41,250.50 points, a new record close.
Of the 11 S&P sectors, six ended in the green.
“The upcoming Labor Day weekend marks the end of summer. In commodities, the grilling and peak driving seasons are ending, impacting animal protein and gasoline prices. With fall and winter on the horizon, natural gas is approaching its peak season. Meanwhile, gold’s ascent signals that fiat currencies are losing value,” Andrew Hecht, investing group leader of Hecht Commodity Report, told Seeking Alpha
“The VIX (VIX) at the 16 level could be too low, given the upcoming U.S. election and the state of the economic and geopolitical landscapes. Enjoy the holiday weekend and prepare for more price variance in markets across all asset classes,” Hecht added.
Equities have returned to near record levels after a shaky end to July and a slump at the beginning of August. The S&P (SP500) advanced more than 1% last week, as investors cheered the Federal Reserve’s indication that it was finally ready to ease monetary policy.
Fed chair Jerome Powell at the annual Jackson Hole symposium said that the time had come “for policy to adjust.” Wells Fargo on Friday had said that one sentence by the Fed chief made it “crystal-clear” that easing was coming. According to the CME FedWatch tool, traders are pricing in 100 basis points of rate cuts this year.
“One unique challenge the FOMC may run into as it commences with rate cuts is the housing market, where a structural imbalance between strong underlying demand and scarce supply threatens to clog a critical channel through which monetary policy typically works,” Wells Fargo had added.
Data on the housing market was in focus on Tuesday as well. A key measure of home prices by S&P Dow Jones Indices hit a new all-time high for June. On the other hand, a similar reading by the Federal Housing Finance Agency ticked down on a M/M basis for June.
Also on the economic calendar was the Conference Board’s monthly gauge of consumer confidence, which surprised to the upside for August.
Turning to the fixed-income markets, U.S. Treasury yields were mixed. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both up 3 basis points each to 4.14% and 3.85%, respectively. The shorter-end, more rate-sensitive 2-year yield (US2Y) was down nearly 1 basis point to 3.94%.
See how Treasury yields have done across the curve on the Seeking Alpha bond page.
Looking at active stocks, Paramount Global (PARA)(PARAA) was the top percentage loser on the S&P 500 (SP500). The decline came after a bidding war over the film studio likely came to an end following the dropping of American businessman Edgar Bronfman’s bid.
Read More: Stock Market News Today: Markets make slight gains a day ahead of Nvidia results