US Stocks Mostly Lower on Monday Amid Tech Sell-Off Led by Nvidia

Strategic Insights -

US stocks traded mostly lower on Monday, driven by a continued sell-off in technology stocks, led by Nvidia, which dropped 5% and is down 14% from its record high amid profit-taking after a 143% year-to-date rally. Investors are now focusing on PCE inflation data set to be released Friday morning. Economists expect year-over-year Core PCE to be 2.6% in May, compared to April's reading of 2.7%. The data will help inform investors as to when the Fed might initiate its first interest rate cut of the cycle, with markets expecting the first rate cut to occur in September.

Key Takeaways:

  • Nvidia led the tech sector lower, falling about 5% and down about 14% from its record high reached last week.
  • According to Wall Street firm Constellation Research, the decline in Nvidia stock is simply profit-taking after its massive year-to-date rally of 143%.
  • Fed President Mary Daly said that the US labor market is showing signs of an inflection point that could ultimately turn lower.
  • Investors will turn to personal consumption expenditures data on Friday, with economists expecting year-over-year Core PCE to be 2.6% in May.
  • Initial jobless claims data, pending home sales, and a second revision to first-quarter GDP will also be tracked to determine the strength of the US economy.
  • The data will help inform investors as to when the Fed might initiate its first interest rate cut of the cycle, with markets expecting the first rate cut to occur in September.
  • Market veteran Ed Yardeni reiterated his view that the S&P 500 will surge to 8,000 by the end of the decade.
  • Used electric vehicle prices are plunging as buyers shift back to hybrid vehicles, with prices down significantly from their peak.
  • Bitcoin showed signs of violating a key support level that could spark a continued sell-off to the $51,500 level, according to Fairlead Strategies.
  • The stock market could triple by 2030 as millennials reshape the economy, according to Fundstrat's Tom Lee.
  • In commodities, bonds, and crypto, West Texas Intermediate crude oil jumped 1.18% to $81.68 a barrel, while Brent crude was higher by 0.95% to $86.05 a barrel.

Statistics:

  • Nvidia stock dropped 5% and is down 14% from its record high.
  • Year-over-year Core PCE is expected to be 2.6% in May, compared to April's reading of 2.7%.
  • Initial jobless claims data will be tracked on Friday to determine the strength of the US labor market.
  • The Fed is expected to initiate its first interest rate cut of the cycle in September.
  • The S&P 500 is expected to surge to 8,000 by the end of the decade, according to Ed Yardeni.
  • Used electric vehicle prices are down significantly from their peak.
  • Bitcoin is trading at $59,713, down 5.49% from the previous day.
  • West Texas Intermediate crude oil jumped 1.18% to $81.68 a barrel.
  • Brent crude was higher by 0.95% to $86.05 a barrel.

Sources:

  • Business Insider: "US stocks, tech sector lower on Monday amid Nvidia sell-off"
  • CNBC: Interview with R "Ray" Wang, Constellation Research founder
  • Wall Street Journal: "Fed President Mary Daly's comments on labor market"
  • Markets Business Insider: Stocks and Commodities articles
  • Ed Yardeni's website: "S&P 500 will surge to 8,000 by the end of the decade"
  • Fairlead Strategies: Bitcoin analysis
  • Fundstrat's website: "The stock market could triple by 2030 as millennials reshape the economy"