Monday, July 15, 2024

Tech Stocks, Led by Nvidia, Drag US Market Lower

US Stocks Lower as Tech Sell-Off Continues: What Investors Need to Know

The stock market took a hit on Monday as US stocks traded mostly lower, with technology stocks leading the decline. Nvidia, in particular, fell about 5% and is now down 14% from its record high reached last week. This drop is attributed to profit-taking after the stock’s remarkable 143% year-to-date rally.

According to Constellation Research founder R “Ray” Wang, the pullback in Nvidia stock is part of a broader trend as investors express concerns about the economy’s direction and consumer spending. Wang believes that this correction presents a buying opportunity for investors looking to take advantage of the dip in prices.

Looking ahead, investors are now turning their attention to the upcoming release of personal consumption expenditures (PCE) data on Friday. Economists are anticipating a slight decline in year-over-year Core PCE to 2.6% in May, compared to the previous month’s 2.7%.

Additionally, initial jobless claims data, pending home sales, and a revision to first-quarter GDP will also provide insights into the health of the US economy. These key indicators will help investors gauge when the Federal Reserve might make its first interest rate cut of the cycle, with expectations currently pointing towards September.

Federal Reserve President Mary Daly also weighed in, suggesting that the US labor market may be approaching a turning point. Daly noted that although the labor market has been relatively resilient, there are signs that it could weaken in the near future.

In commodities, West Texas Intermediate crude oil and Brent crude both saw gains, while gold prices edged higher. The 10-year Treasury yield remained stable, and Bitcoin experienced a 5.49% drop.

As the market continues to react to economic data and investor sentiment, it remains to be seen how these factors will influence future market movements and the Fed’s monetary policy decisions.

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