By Alex Financials

Recent Rally and Early Week Pullback

Following a historic surge on Friday, with the Dow Jones Industrial Average ($DJI) hitting an all-time closing high, U.S. markets began Monday with a modest pullback as investors digested Federal Reserve Chair Jerome Powell’s dovish signals and awaited a heavy week of corporate earnings reports. The S&P 500 ($SPX) and Dow slipped up to 0.5% in early trading, while the Nasdaq Composite ($IXIC) was flat to slightly positive, led by surging tech stocks such as $NVDA.

All Eyes on $NVDA’s Earnings

The centerpiece of the week is Nvidia’s ($NVDA) highly anticipated earnings, scheduled to be released Wednesday after market close. As the leading S&P 500 component and a bellwether for artificial intelligence hardware demand, $NVDA’s report is seen as a potential market mover. Analysts expect revenue of over $46 billion and earnings per share just above $1, reflecting surging AI-related demand. $NVDA stock rose 2% in early Monday trading amid optimism, even as other tech names posted mixed results.

Federal Reserve and Interest Rate Speculation

Markets remain focused on Federal Reserve policy after Chair Powell’s indication on Friday that rate cuts could begin as early as September, spurring last week’s rally. Traders are now pricing in an 87% probability of a September rate cut, up sharply from 62% a month ago. Yields on U.S. Treasuries have stabilized as investors await confirmation from upcoming inflation and labor data.

Sector and Stock Movers

Friday’s rally was driven by consumer discretionary, energy, materials, and financial stocks, with all major S&P 500 sectors except consumer staples rising. Monday’s action brought a mix of notable gainers and laggards:

• Winners: Corning ($GLW), MarketAxess ($MKTX), Howmet Aerospace ($HWM), Amphenol ($APH), and Nike ($NKE) all saw gains on robust demand across tech, finance, and consumer segments.

• Underperformers: Best Buy ($BBY), Fortinet ($FTNT), Enphase Energy ($ENPH), Starbucks ($SBUX), and LyondellBasell ($LYB) led declines due to sector-specific concerns ranging from sales slowdowns to energy price volatility.

What Analysts and Investors Are Watching

This week’s focus remains on $NVDA’s earnings for signs of AI-driven growth, as well as for any indications from Fed officials or new economic data that might shift rate-cut expectations. Investors are also monitoring global headlines, policy updates on trade and tariffs, and key sector performances, particularly in tech, industrials, and energy.