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Stocks pause as Dow tries to break above $40,000 again

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U.S. stocks were little changed on Monday as the Dow closed above 40,000 for the first time as copper prices soared and Nvidia (NVDA) earnings loomed.

The S&P 500 (^GSPC) rose 0.1%, while the Dow Jones Industrial Average (^DJI) was nearly flat after the blue-chip benchmark hit a record high. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, rose about 0.1%.

Stocks rose as investors grew more optimistic that the Federal Reserve would cut interest rates soon, despite warnings from policymakers. All three major indexes closed at all-time highs on Friday as risk appetite increased and Wall Street strategists gave a bullish outlook for stocks.

The key question for investors is whether that outlook is sustainable or ahead of the Fed’s direction. Monday’s appearance by Christopher Waller, Philip Jefferson and other officials could shed some light on this debate. But as Yahoo Finance’s Josh Schafer reports, the first test will come Wednesday with the release of the minutes of the May Fed meeting.

read more: How does the labor market affect inflation?

The market is also bracing for Nvidia’s highly anticipated quarterly results on Wednesday, seen as a key catalyst for the stock’s rise. Expectations for the AI ​​chipmaker’s revenue and revenue are sky high, with growth expected to be 400% and 240% respectively, and the focus is once again on whether it can live up to the hype.

At the same time, there are growing concerns that the rise in commodity markets could lead to a knock-on rise in U.S. inflation. LME copper prices topped $11,000 a tonne for the first time, rising to a record high as investors flocked to looming supply shortages. Meanwhile, gold prices (GC=F) soared, hitting a new intraday high around $2,450 per ounce.

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  • Stocks remain little changed as the Dow tries to break above the $40,000 level again.

    US stock markets started mixed on Monday, with the Dow Jones Industrial Average (^DJI) struggling to extend Friday’s gains.

    The blue-chip index opened just below the flatline after closing above 40,000 for the first time on Friday.

    The S&P 500 (^GPSC) was little changed, and the tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.1%.

    Investors are keeping an eye on Nvidia’s (NVDA) financial results, which will be released on Wednesday. Traders are also keeping an eye on the metals market after gold (GC=F) hit a new intraday high this morning. Silver (SI=F) hovered near a nearly 12-year high, and copper (HG=F) also rose amid an energy transition that requires industrial metals.

  • Gold briefly reaches all-time highs as metals markets continue to rise

    Gold (GC=F) rose to just above $2,450 an ounce in early Monday trading, its all-time high before falling.

    Precious metals prices have rebounded, surpassing April’s nominal highs, on expectations that the U.S. Federal Reserve will cut interest rates this year. Strong demand from central banks and Asian buyers has also pushed gold prices up about 17% since the beginning of the year.

    Meanwhile, silver (SI=F) remains at its highest since December 2012, briefly surpassing $32 an ounce on Monday after Friday’s strong rally. Unlike gold, silver is used in industrial applications for purposes such as the construction of solar panels.

    On Monday, copper (HG=F) hit a record high on concerns about supply shortages during the energy transition. Year-to-date, metal prices are up about 30%. John LaForge, Wells Fargo’s head of real estate strategy, said the rally in recent days has likely attracted speculators, but the fundamentals of supply haven’t changed.

    “Frankly, we don’t produce enough copper, but there are buyers for this copper all over the world,” LaForge recently told Yahoo Finance.

    “It doesn’t matter if it’s China, India or the United States. Everyone is going green, and when you think about that kind of future, copper is the number one metal.”

  • watching Dr. Copper

    If the economy is bracing for a pre-election slowdown, it’s unlikely to be the industrial metal copper.

    Copper prices hit record highs.

    Copper Rio Tinto (RIO) is targeting a one-year high.

    Looking at copper prices over a five-year period, they are at record highs.Looking at copper prices over a five-year period, they are at record highs.

    Looking at copper prices over a five-year period, they are at record highs. (Yahoo Finance)

  • Expectations are very high for Nvidia

    I woke up today to find that Nvidia (NVDA) is the No. 3 trending ticker on the Yahoo Finance platform ahead of Wednesday’s earnings report.

    Clearly, the retail investor community is bracing for another impressive set of financial results (results and guidance) from the AI ​​darling.

    But the important point was made by Bank of America’s Vivek Arya this morning. Nvidia’s good stuff might not be enough.

    Aria says:

    “According to the bullish investors we spoke to, expectations appear to be well above consensus expectations, as usual, with reported fiscal first quarter (April) sales expected to be $26 billion. This is 6% above the consensus of $24.6 billion, and we expect guidance to be close to consensus expectations.”Second, gross margin is expected to reach 77% in the first quarter. , expected to decline to 75%-76% in Q2 (with some period of normalization). (Temporary factors have pushed the stock over 75% in recent quarters.) But even if Nvidia lives up to these bullish expectations, bears could complain that: Stock prices may still react adversely. The outlook for fiscal second quarter (July) is “only” 7%-8% sequentially, and for the past few quarters he has been in the mid-teens or well below. 2) Gross margins have peaked and the decline is a sign of price pressure, an unfavorable mix (increasing Chinese H20 shipments and/or increasing inference units) and slowing demand/easing supply. ”

  • Memories of Nvidia

    Deutsche Bank strategist Jim Reid pondered this ahead of Wednesday’s Nvidia (NVDA) earnings report.

    “Recall that this time last year, the mainstream AI frenzy started around Nvidia’s earnings release, with the company’s stock up more than 20% on earnings day and now tripling in value in 12 months. ”

    Nvidia stock has increased 197% since its earnings report on May 24, 2023.



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