NEW YORK: Wall Street’s main indexes were mixed in choppy trade on Monday after a scorching AI-led rally, as investors braced for key inflation data this week which could impact Federal Reserve’s rate cut path.
The release of January’s personal consumption expenditures price index (PCE)- the Fed’s preferred inflation gauge - on Thursday could hinder the recent stocks rally if the data points to persistent price pressures.
“After hotter-than-expected CPI and PPI readings earlier this month, more people may be looking to the PCE to for insight into the reinflation threat, and how it may influence the Fed’s timing of rate cuts,” said Chris Larkin, managing director of trading at E*TRADE from Morgan Stanley.
Traders pushed back bets of the first rate cut to June from May earlier this month after readings on consumer (CPI) and producer (PPI) prices pointed to sticky inflation.
Investors will also watch out for data on durable goods, consumer confidence and manufacturing activity.
A bumper forecast from heavyweight chip designer Nvidia in the previous week added to this year’s artificial intelligence (AI) frenzy, propelling Wall Street to new peaks and overshadowing the gloom due to a likely delayed start to the Fed’s easing cycle.
The S&P 500 has gained for 15 of the past 17 weeks- something which has only happened only once in the last 50 years, in 1989, according to Deutsche Bank.
The S&P 500 and the Dow Jones industrials both notched all-time highs last week, while the tech-heavy Nasdaq came within a close range of its record intraday peak hit in November 2021.
At 11:26 a.m. ET, the Dow Jones Industrial Average was up 5.11 points, or 0.01%, at 39,136.64, the S&P 500 was down 6.40 points, or 0.13%, at 5,082.40, and the Nasdaq Composite was up 5.21 points, or 0.03%, at 16,002.03.
Megacap growth stocks were mixed in early trading on Monday. Nvidia rose 1.2% after hitting $2 trillion in market value for the first time on Friday. Tesla outperformed peers, rising 4.0%.
Also propping up the Nasdaq was a 5.8% gain in Micron Technology as it started mass production of its high-bandwidth memory semiconductors for use in Nvidia’s latest AI chip. The Philadelphia semiconductor index gained 1.1%.
Google-parent Alphabet dropped 3.7% after announcing plans to relaunch its AI tool in the next few weeks. It was paused last week after inaccuracies in some historical depictions. Warren Buffett-led Berkshire Hathaway shed 1.2%, erasing early gains on investor worries after the US government warned of a lawsuit against its power company, PacifiCorp.
Domino’s Pizza jumped 6.1% on surpassing Wall Street expectations for quarterly same-store sales.
Intuitive Machines slumped 32.0% after the company said its spacecraft had tipped over shortly after touching down on the lunar surface.
Declining issues outnumbered advancers for a 1.40-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.37-to-1 ratio on the Nasdaq.
The S&P index recorded 57 new 52-week highs and one new low, while the Nasdaq recorded 97 new highs and 58 new lows.