Nasdaq, Dow Jones, S&P 500 News: Futures Inch Higher; Nvidia’s Decline Sparks Caution

Stock Futures Edge Higher as Market Nears Record Highs

Stock futures advanced modestly on Monday as the market approaches the end of June and the first half of 2024 near record highs. The S&P 500 set an intraday record of 5,505.53 on Thursday, contributing to another winning week with a 0.6% gain. This marks the index’s eighth positive week in the past nine, reflecting strong market momentum despite emerging signs of exhaustion, particularly with Nvidia’s recent performance.

At 11:49 GMT, Dow futures are trading 39684.00, up 101.00 or +0.26%. S&P 500 Index futures are at 5539.25, up 5.00 or +0.09% and Nasdaq-100 Index futures are trading 19972.00, down 10.75 or -0.05%.

Nvidia’s Pullback Raises Caution

Nvidia, a major player in the market, experienced a notable decline last week, falling 4% following two consecutive drops exceeding 3%. This decline came shortly after Nvidia briefly surpassed Microsoft as the most valuable U.S. company. Chart analysts have identified bearish patterns in Nvidia’s recent trading, suggesting potential volatility ahead. While this pullback does not undermine Nvidia’s robust fundamentals, it highlights concerns over the rapid rise in its stock price.

Artificial Intelligence Boosts Market Despite Economic Concerns

The enthusiasm surrounding artificial intelligence has significantly bolstered the market this year, helping the S&P 500 climb nearly 15% year-to-date with 31 record closes. This optimism persists even as investors contend with changing expectations for rate cuts and a slowing economy. The S&P 500’s resilience is further underscored by its 377-day streak without a 2.05% sell-off, the longest since the financial crisis, according to FactSet data.

Treasurys Steady Ahead of Key Inflation Report

Treasurys remained stable as investors awaited Friday’s critical inflation report. With a summer rate cut from the Federal Reserve unlikely, attention is shifting to potential action in September. The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, is expected to show a decrease in the annual rate of price rises to 2.6% in May from 2.8% in April. Currently, traders are pricing in a 66% chance of a September rate cut, according to CME’s FedWatch tool.

Bitcoin Declines Amid Broader Market Movements

Bitcoin dropped more than 4% on Monday, extending its June losses to 9%. Despite this recent downturn, the cryptocurrency remains up over 44% for the year. Investors are closely watching the upcoming PCE data and several key earnings reports from companies like FedEx, Micron, Walgreens Boots Alliance, and Nike, which could provide further market direction.

Market Forecast

Looking ahead, the market’s short-term outlook remains cautiously optimistic. The S&P 500’s strong performance and resilience suggest potential for further gains, though volatility may increase, particularly in tech stocks like Nvidia. The upcoming PCE inflation data will be crucial in shaping expectations for future Federal Reserve actions, which could influence broader market trends. Traders should remain vigilant, balancing optimism with caution as economic indicators and corporate earnings reports unfold.

Technical Analysis

Although E-mini S&P 500 Index futures are slightly better early Monday, the benchmark index remains vulnerable to a near-term correction due to the potentially bearish impact of last Thursday’s closing price reversal top.

The short-term range is 5205.50 to 5588.00. Its pivot at 5396.75 is the primary downside target. A trade through 5588.00 will negate the chart pattern and signal a resumption of the uptrend.