Market Strategy

After a weaker-than-expected jobs report rattled markets last week, and the manufacturing sector contracted more than anticipated last month, investors will get fresh data on the services sector, consumer credit levels, and more this week.

It will be a busy week for markets with big events in monetary policy and earnings from more than half of the Magnificent Seven companies. The Federal Reserve will announce its latest decision on interest rates this Wednesday, which will be followed by comments from Chair Jerome Powell.

U.S. stocks ended Friday trading in the red as Wall Street concluded a week characterized by a shift from this year’s megacap winners to smaller names. The S&P 500 fell by 0.71%, closing at 5,505.00. The Nasdaq Composite dropped 0.81%, ending at 17,726.94. The Dow Jones Industrial Average decreased by 377.49 points, or 0.93%, to 40,287.53.

This week, the focus will shift to the earnings season, as economic data and central banker speeches will be relatively light. Nevertheless, market participants will keep an eye on economic reports for insights into the Federal Reserve’s future policy decisions.

The S&P 500 rose to a new high on Friday, achieving a record close as the latest jobs report fueled hopes for Federal Reserve rate cuts.

Although the Independence Day holiday on Thursday shortens the trading week, the Friday release of the U.S. jobs report gives investors significant data to close the week. Before that, Federal Reserve Chair Jerome Powell will make comments at an international conference, followed by the release of the minutes from the Fed’s June meeting. 

The S&P 500 dipped on Friday as shares of market darling Nvidia (NASDAQ:NVDA) fell for the second consecutive day. The broad market index declined by 0.16%, closing at 5,464.62, while the Nasdaq Composite dropped 0.18% to 17,689.36. The Dow Jones Industrial Average inched up 15.57 points, or 0.04%, to end at 39,150.33.

In a holiday-shortened week, investors will be watching comments from Federal Reserve representatives and data from several economic releases that could help show whether inflation is likely to continue its downward path.  Markets are closed on Wednesday for the Juneteenth national holiday.

The Federal Reserve’s meeting this week likely won’t result in a change in interest rates, but it is likely to show where the central bank is heading, as investors will digest projections data, along with comments from Chair Jerome Powell. Market watchers also will be tuned in to the Consumer Price Index (CPI) report for indications on whether price pressures continue to ease. 

Inflation will take center stage in a holiday-shortened week with the Friday release of the Personal Consumption Expenditures (PCE) index, showing whether price pressures continued to cool in April. Markets are closed on Monday for the Memorial Day holiday. Investors will be eyeing tech earnings this week, with Salesforce (CRM) and Dell (DELL) likely to grab attention.

Artificial intelligence (AI) darling Nvidia (NVDA) is set to report earnings after markets close on Wednesday, in what could be a highlight of this week's events. The chipmaker is expected to post another strong quarter of earnings and revenue growth amid a surge in demand for AI. 

On Friday, the Dow Jones Industrial Average (DJIA) concluded its eighth straight day of gains, marking its best week in 2024. The index increased by 125.08 points, or 0.32%, finishing at 39,512.84. Meanwhile, the S&P 500 rose by 0.16% to close at 5,222.68, but the Nasdaq Composite declined marginally by 0.03%, ending the day at 16,340.87.