Nasdaq 100: Nvidia Surge Lifts Tech Stocks as Investors Brace for Inflation Data

Stocks Mixed as Investors Eye Inflation Data

U.S. stock markets showed mixed performance on Monday as investors prepared for key inflation data later in the week. Following a volatile trading period, the markets are now cautiously awaiting signals from upcoming economic reports that could determine the short-term direction.

At 15:13 GMT, the Dow Jones Industrial Average is trading 5370.58, up 26.42 or +0.49%. The S&P 500 Index is at 5370.58, up 26.42 or +0.49% and the Nasdaq 100 Index is trading 16895.65, up 150.35 or +0.90%.

Nvidia Drives Nasdaq Higher

Nvidia shares led gains on Monday, surging 5% and lifting the Nasdaq Composite. The semiconductor giant, a prominent player in the AI sector, continues to attract investor interest ahead of its upcoming second-quarter earnings report on August 28. The stock’s rise provided a boost to the broader technology sector, with Microsoft and Apple also posting modest gains.

Small Cap Stocks Weaken

In contrast, small-cap stocks faced early challenges this week. The Russell 2000 index declined 0.6% in Monday morning trading, erasing most of the gains made during July’s market rotation. The index is now up roughly 1% for the third quarter, reflecting a more cautious outlook among investors toward smaller companies.

KeyCorp Soars on Strategic Investment

KeyCorp shares soared over 20% in premarket trading after the Bank of Nova Scotia announced plans to acquire a 14.9% minority stake in the Cleveland-based regional bank for $2.8 billion. The investment, priced at $17.17 per share, represents a significant premium over KeyCorp’s Friday closing price of $14.61. The infusion of capital is expected to strengthen KeyCorp’s balance sheet, with CEO Chris Gorman highlighting plans to enhance the bank’s investment banking, payments, and wealth management operations. This move is seen as a positive signal for regional banks, which have been under pressure due to rising interest rates and associated challenges.

Starbucks Gains on Activist Investor News

Starbucks shares rose 2.6% in premarket trading following reports that activist investor Starboard Value has taken a stake in the company. According to the Wall Street Journal, Starboard is pushing for measures to increase the coffee chain’s stock price, indicating potential changes ahead for the company.

Market Outlook: Volatility Expected Ahead of Inflation Data

Investors are bracing for key economic data this week, particularly Wednesday’s Consumer Price Index (CPI) report, which could provide crucial insights into the health of the U.S. economy. Following a turbulent period, markets are on edge, with analysts suggesting that recent declines may have established a short-term bottom. However, ongoing concerns about economic growth could lead to continued volatility. With emotions running high, traders should prepare for potential market swings as the week progresses.

Technical Analysis

E-mini Nasdaq-100 Index futures are higher on Monday, but trading is subdued, despite the chart showing there is plenty of room to the upside.

The index is trading on the strong side of the 50-day moving average, which is near-term support. The major support is a long-term retracement zone at 17858.50 to 17198.25.

On the upside, the key target is the 50-day moving average at 19619.70. Given its distance from the current price, the way of least resistance is up, provided the CPI data is bullish.