In evening trading on Sunday, U.S. stock index futures showed little movement, as investors exercised caution ahead of an upcoming Federal Reserve meeting, refraining from significant trades. Additionally, attention was drawn to Nvidia Corp’s annual developer conference, highlighting the ongoing importance of artificial intelligence in the market.
Following a retreat from record highs over the previous two weeks, Wall Street indexes reflected a pause in the rally of heavyweight technology stocks, which had been fueled by excitement surrounding artificial intelligence. Concerns were further amplified by a series of hotter-than-expected inflation readings, raising apprehensions about the Federal Reserve potentially signaling a prolonged period of higher interest rates.
S&P 500 Futures registered a modest increase of 0.05%, reaching 5,185.50 points, while Nasdaq 100 Futures showed a slight uptick of 0.1%, reaching 18,071.0 points as of 19:04 ET (23:04 GMT). Conversely, Dow Jones Futures experienced a marginal decline of 0.1%, reaching 39,126.0 points.
Fed in focus after hot inflation readings
With the conclusion of a two-day Federal Reserve meeting slated for Wednesday, market attention has intensified on any indications regarding the central bank’s stance on interest rates. While the consensus anticipates the Fed to maintain interest rates at their current levels, investors are closely monitoring for signals regarding potential rate cuts.
Last week’s hotter-than-expected consumer and producer inflation readings heightened concerns that the Fed might adopt a more hawkish stance during this week’s meeting. Fed officials have emphasized that the trajectory of inflation will heavily influence any decisions regarding rate adjustments, especially given the persistent elevated levels of inflation above the Fed’s 2% annual target.
The apprehension surrounding the Fed’s stance exerted slight downward pressure on Wall Street indexes last week. The S&P 500 declined by 0.7% to reach 5,117.09 points on Friday, while the NASDAQ Composite experienced a 1% drop to 15,973.17 points. Similarly, the Dow Jones Industrial Average concluded the week with a 0.5% decrease, closing at 38,714.77 points.
Although the S&P 500 and the Dow registered minimal weekly losses, the Nasdaq witnessed a 0.7% decline primarily due to substantial profit-taking in technology stocks. This downward trend underscores the market’s sensitivity to developments related to the Federal Reserve’s monetary policy stance.
Nvidia conference awaited for more AI cues
Ahead of the Federal Reserve meeting, this week’s spotlight is on NVIDIA Corporation’s (NASDAQ: NVDA) GTC conference in San Jose, California. This marks Nvidia’s first annual developer conference held in person since the onset of the COVID-19 pandemic.
As a central figure in the AI-driven market surge witnessed over the past year, Nvidia is anticipated to unveil its latest flagship chips tailored specifically for AI development during the event. CEO Jensen Huang is scheduled to deliver the keynote address on Monday, where he is expected to introduce Nvidia’s next-generation AI chip, likely named the B100.
Nvidia’s remarkable valuation surge throughout 2023 and into 2024 has positioned it as Wall Street’s third most valuable company, trailing only behind Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT), owing largely to its advancements in AI technology.
Although the recent rally in Nvidia’s stock has experienced a temporary slowdown, the GTC conference holds significant potential to reignite momentum not only for Nvidia but also for the broader technology sector. Investors will be closely watching announcements and developments emerging from the conference, anticipating their impact on market sentiment and sectoral performance.