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Wall Street Stocks Slide After Interest Rate Hints, Ahead of Nvidia Earnings

Strategic Insights

— 2 min read

The Dow Jones Industrial Average closed in the negative on Monday, while investors digested a rally on Friday that lifted the blue-chip index to a record high close. The market's optimism was fueled by U.S. Federal Reserve Chair Jerome Powell's comments at the Jackson Hole Symposium, where he hinted at an interest-rate cut. However, the focus now shifts to crucial economic reports, including the Personal Consumption Expenditures Price Index and nonfarm payrolls data.

Key Takeaways:

  • The S&P 500 declined 0.43% to end the session at 6,439.32 points, while the Dow Jones Industrial Average fell 0.77% to 45,282.47 points, and the Nasdaq declined 0.22% to 21,449.29 points.
  • Traders now see an 84% chance of a Fed rate cut in September, according to CME Group's FedWatch tool, after Powell's comments nudged major brokerages to revise their expectations.
  • Nvidia climbed 1% ahead of its quarterly report on Wednesday, which will be one of Wall Street's most closely watched events of the week and a crucial test of the scorching AI trade.
  • The Canadian banks will kick off earnings season on Tuesday, beginning with Bank of Montreal and Bank of Nova Scotia, with nine of the 11 S&P 500 sector indexes dropping.
  • The S&P 500 posted 17 new highs and no new lows, while the Nasdaq recorded 125 new highs and 39 new lows.
  • Beverage company Keurig Dr Pepper tumbled 11.5% after saying it would buy JDE Peet's for US$18.4 billion in cash.
  • Furniture retailers RH and Wayfair each declined more than 5% after U.S. President Donald Trump said his administration would investigate furniture import tariffs.
  • Intel fell 1% after Trump said the U.S. government was taking a stake in the chipmaker.

Statistics:

  • The S&P 500 declined 0.43% to 6,439.32 points, the Dow Jones Industrial Average fell 0.77% to 45,282.47 points, and the Nasdaq declined 0.22% to 21,449.29 points.
  • Nvidia makes up about 8% of the S&P 500.
  • The Toronto Stock Exchange's S&P/TSX composite index closed down 0.58% at 28,169.94 points.
  • Canada's big six banks are expected to set aside a total of $5.22 billion in loan-loss provisions for the third quarter.
  • Volume on U.S. exchanges was relatively light, with 14.2 billion shares traded, compared to an average of 17.1 billion shares over the previous 20 sessions.
  • Declining stocks outnumbered rising ones within the S&P 500 by a 4.0-to-one ratio.

Sources:

  • Reuters
  • Globe staff

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