Technology Stocks Recover Slightly
Nvidia edged up 0.7%, continuing its modest recovery after a significant selloff that erased $430 billion from its market value. The broader Philadelphia Semiconductor index climbed 0.5%, bolstered by a 1% increase in Micron Technology ahead of its quarterly earnings release. Apple also rose 1.2% following an upgrade by Rosenblatt from “neutral” to “buy.”
Broader Market Implications
Art Hogan, chief market strategist at B Riley Wealth, noted the ongoing debate on whether the market’s focus should remain on top stocks like Nvidia, Apple, and Microsoft, or shift to other components of the S&P 500. This uncertainty is expected to persist until the second-quarter earnings season provides more clarity.
Significant Movers
FedEx surged nearly 13% after forecasting a fiscal 2025 profit above expectations. Whirlpool jumped 12.4% amid reports that Robert Bosch is considering a bid for the U.S. appliances manufacturer. The Nasdaq, S&P 500 information technology index, and the Philadelphia chip index all gained over 1% on Tuesday, signaling a rebound for tech stocks.
Economic Data and Federal Reserve Focus
Investors are closely watching several economic data releases this week, culminating in the personal consumption expenditures price index on Friday, the Federal Reserve’s preferred inflation gauge. Current market sentiment indicates a nearly 60% chance of a 25-basis point rate cut in September and two cuts by the end of the year, according to LSEG’s interest rate probabilities app.
Bank and Sector-Specific Updates
Shares of major U.S. banks, including JPMorgan Chase, Citigroup, and Bank of America, fell between 0.9% and 1.2% ahead of the Fed’s banking sector stress test results. The S&P 500 financial index dropped 0.6%. In contrast, Rivian soared 33% on news of Volkswagen’s planned $5 billion investment in the electric vehicle maker. Southwest Airlines fell 2.6% after cutting its second-quarter unit revenue forecast due to uneven travel demand, while General Mills declined 5.4% following a disappointing profit forecast and quarterly sales.
Market Forecast
Given the mixed signals across various sectors, the short-term market outlook remains uncertain. The anticipated inflation data will be pivotal in shaping expectations for Federal Reserve policy moves. Should the data indicate moderated price pressures, it could support a bullish trend, particularly for tech stocks that have shown resilience. Conversely, any signs of persistent inflation may prompt a cautious or bearish stance among investors.