Nasdaq Index, Dow Jones, S&P 500 News: Investors Bracing for Fed Decision, Inflation Data

view original post

Market Performance Recap

Last week saw positive momentum in the major averages, with the S&P 500 achieving a record intraday high on Friday. The index rose by 1.32%, while the Dow Jones Industrial Average gained 0.29%, and the Nasdaq Composite surged by 2.38%. Nvidia was a standout performer, advancing 10% and surpassing a $3 trillion market capitalization for the first time due to enthusiasm for its AI capabilities.

Stocks on the Move

Several stocks made notable moves in premarket trading. KKR, CrowdStrike, and GoDaddy saw significant gains as they prepared to join the S&P 500 index. Conversely, Robert Half, Comerica, and Illumina, set to leave the index, experienced declines. Notable movements also included AMD, which fell over 2% after a Morgan Stanley downgrade, and DraftKings, which rose 1.8% following a positive reiteration from the same firm.

JPMorgan Upgrades Walmart

In a strategic move, JPMorgan upgraded Walmart to overweight, projecting a potential 23% rally in the stock over the next 18 months. The upgrade was attributed to a desire to add more defensive stocks amid signs of softening discretionary spending and an uncertain economic outlook, including the presidential election cycle and holiday calendar impacts.

Key Economic Events

Investors are closely watching for the Fed’s rate decision and May’s consumer price index (CPI), both set for release on Wednesday. Economists expect a 3.4% annual rise in CPI, with a modest 0.1% monthly increase. Core CPI is projected to rise by 3.5% year-over-year. The Fed’s updated projections on rate cuts will also be crucial, with markets currently pricing in a single rate cut in November.

Market Forecast

Given the mixed signals from the labor market and inflation data, market sentiment remains cautious. While a dovish tilt could emerge from rising unemployment rates, strong labor demand growth may keep the Fed on a measured path. The upcoming data releases and Fed decision will be critical in shaping short-term market trends, with a potential for increased volatility based on the outcomes.