This article discusses the recent comments from Federal Reserve Chair Jerome Powell regarding the need for policy adjustments, which led to a positive response from investors and a rise in stock prices. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all saw gains of more than 1% for the week.
The market will face a test this week with the highly anticipated earnings release from Nvidia, along with reports from companies like Salesforce, Best Buy, Dell, and Lululemon. Additionally, a key reading of the Fed’s preferred inflation gauge will be released, which will provide insight into the economic outlook.
Powell indicated that interest rate cuts are coming in September, but the pace and timing of these cuts will depend on incoming data. The market quickly priced in the possibility of four rate cuts of 0.25% by the end of 2024. There is also speculation about the potential for a 0.50% rate cut at the September meeting.
Nvidia’s earnings report is expected to show significant growth in earnings and revenue, with a focus on updates regarding their new Blackwell chip. The stock has seen a significant increase year to date and is closely watched by investors.
Overall, the tech sector, including the “Magnificent Seven” tech stocks, has seen volatility but may be settling down. Investors are cautiously optimistic about the outlook for these stocks following recent market movements.
The article also provides a weekly calendar of economic data releases and earnings reports to watch for in the coming week.