Wall Street awaits economic data and Fed statements

Wall Street's major indices experienced minor decreases on Monday as investors eagerly awaited upcoming economic data releases and statements from Federal Reserve officials to gain a better understanding of monetary policy. Despite the overall decline, megacap stocks like Apple and Microsoft played a crucial role in limiting the losses. Apple saw a modest gain of 0.3%, while Microsoft rose by 0.9%. Notably, Nvidia, a prominent player in AI chips, achieved a new record high with a 1% increase. The Philadelphia SE Semiconductor index also hit an all-time high, driven by notable gains in chip stocks such as Broadcom and U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. Micron Technology surged by 2% following price-target upgrades by brokerages. Additionally, Autodesk experienced a significant 4.5% jump after reports emerged of activist investor Starboard Value acquiring a substantial stake in the company. The technology sector emerged as the top performer among the 11 S&P 500 sector indexes.

On the previous Friday, the Dow witnessed weekly declines, while the Nasdaq marked its fifth consecutive record closing high. The S&P 500 also reached multiple all-time highs in the preceding week. Despite the recent market rally, some investors remain cautious about the sustainability of the current equity surge, particularly as it has been predominantly driven by a few megacap growth and technology stocks. Goldman Sachs raised its year-end target for the S&P 500 Index to 5,600, suggesting a potential 3.2% increase from current levels.

Investor attention is focused on statements from key Federal Reserve officials such as John Williams, Patrick Harker, and Lisa Cook. Economic indicators including retail sales data, industrial production, housing starts, and S&P flash PMI data are anticipated later in the week. Recent hawkish signals from the Federal Reserve have contradicted data indicating economic weakness. The central bank revised its rate cut projections for 2024, reducing them from three to one. However, market expectations still indicate two 25-basis-point cuts this year, with easing expected to commence at the September meeting.

As of 9:47 a.m. ET, the Dow Jones Industrial Average was down 0.24%, the S&P 500 was down 0.10%, and the Nasdaq Composite was down 0.10%. The trading week will be shorter due to market closures on Wednesday. Declining issues outnumbered advancers on both the NYSE and Nasdaq, with the S&P index recording new highs and lows, alongside the Nasdaq.

Wall Street experienced slight declines as investors eagerly awaited crucial economic data releases and statements from Federal Reserve officials. Despite the market rally, concerns persist regarding the sustainability of the current equity surge, primarily driven by a few megacap growth and technology stocks. The upcoming week holds key economic indicators and Fed statements that will likely influence market sentiment and direction.