.jpg)
Stocks rose in early trading on Monday, hitting record highs, following Friday’s rally on a clear signal from the central bank that it will cut interest rates.
The Dow Jones Industrial Average rose 123.04 points, or 0.30 percent, to 41,298.12, while the S&P 500 rose 0.24 percent to 5,648.17 and the technology-heavy Nasdaq Composite advanced 11 percent to 17,898.11.
Investors were pleased with the central bank’s signal on interest rates, but worried about the situation in the Middle East, where Israel and the Hezbollah terrorist group exchanged attacks over the weekend. Oil prices rose as a result, Bloomberg reported.
Investors will be focusing this week on the upcoming second-quarter financial report from AI chip maker Nvidia, due after the market closes on Wednesday.
On Friday, the S&P 500 rose. The US dollar ended the day up 1.15%, approaching a new record high of 1%. Investors reacted to Federal Reserve Chairman Jerome Powell’s assurance that inflation is on track to the central bank’s 2% target and that “the time has come” to adjust interest rate policy accordingly.
Speaking at the Fed’s annual conference in Jackson Hole, Wyoming, Powell said the labor market had cooled significantly and that the balance between his two-pronged mission of full employment and low inflation had shifted toward jobs.
Related: NVIDIA’s Jensen Huang and New Inflation Data Could Rock Markets
“Powell’s speech in Jackson Hole was largely tied to the bond market, which is why yields stayed where they were after his dovish comments,” said Richard Saperstein, chief investment officer at Treasury Partners.
“The coming regime of lower interest rates provides the fuel needed for higher stock prices. The relationship between stocks and bond yields is important, especially during a period of Fed policy shift,” he added.
On Friday, the Commerce Department’s Bureau of Economic Analysis will release a report on the Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index. The index measures changes in the prices of goods and services that consumers buy and use. As of Sunday afternoon, the consensus estimate was for a 2.4% increase, The Street’s Charlie Blaine reported.
Nvidia (NVDA program) The company is expected to report earnings that more than doubled to 64 cents a share from 25 cents in the year-ago quarter. Revenue is also expected to double to $28.6 billion.
“Nvidia is clearly a big player in the market, and every earnings announcement will be a big surprise,” Saperstein said. “The bar remains high for Nvidia to prove that AI spending is continuing at a rapid pace.”
Other companies to watch this week include CrowdStrike, (Crood) The company will also report its second-quarter results on Wednesday. The company is trying to manage the damage it suffered last month when it sent out an update that caused computer applications to go out around the world.
Other major companies reporting include department store retailer Nordstrom. (JWN) On Tuesday, customer relationship management software giant Salesforce announced (Customer Relationship Management) On Wednesday, computer giant Dell Technologies announced (Dell) And a powerful Marvell chip (MRVL) Thursday.
“Investors should maintain exposure to large-cap technology stocks that benefit from large and growing recurring revenues, AI tailwinds, and a safe haven from macro volatility,” Saperstein said. “The August sell-off provided an opportunity to establish or increase exposure.”
