U.S. stocks retreated on Monday, with the Dow Jones Industrial Average dropping more than 300 points, or about 0.8%, after closing at its first record high of 2025 on Friday.
Why it matters: The market pullback comes as investors focus on upcoming earnings reports, particularly from Nvidia, and assess the likelihood of a Federal Reserve rate cut in September.
The details:
- The S&P 500 fell 0.4%, and the tech-heavy Nasdaq Composite trimmed session gains to close down 0.2%.
- Nvidia, the most valuable stock in the S&P 500, will report results after the closing bell on Wednesday. Analysts expect the chipmaker to post earnings of $1.01 per share on $46.13 billion in revenue.
- The U.S. dollar strengthened, reversing the decline it experienced on Friday.
- Bitcoin and Ethereum also saw declines on Monday, giving up much of their gains from Friday’s rally following Powell’s speech.
What they’re saying:
- “The market is in a state of flux as it digests the latest data and Federal Reserve communications,” said a financial analyst from New York. “The strengthening of the dollar and declining stock prices suggest a cautious sentiment among traders.”
- UBS analysts expect the Federal Reserve to start easing in September unless a strong August jobs report or higher-than-expected inflation changes the outlook. Analysts anticipate four quarter-point rate cuts through January 2026, starting in September.
What’s next: Investors will focus on earnings reports from Dell and Marvell Technology on Thursday, as well as Friday’s July PCE inflation report, the Fed’s preferred measure of inflation. Economists expect core PCE to rise 2.9% year-over-year.
