Overview:
On September 11, 2024, U.S. stock futures dipped slightly as gains from tech stocks, particularly Nvidia, cooled off. The market had rallied earlier in the day, led by the technology sector, but investor focus shifted toward the upcoming interest rate decision by the Federal Reserve. A stronger-than-expected reading on the Core Consumer Price Index (CPI) increased concerns that inflation might remain sticky, causing traders to scale back their expectations for a larger 50 basis point rate cut by the Fed.
Despite these concerns, Nvidia surged during the day by more than 8%, driven by strong demand for its AI chips, particularly its new Blackwell line, but saw a slight pullback of 0.2% in aftermarket trading. Gains in Nvidia had a positive spillover effect on broader tech stocks, but the market is still recovering from the steep selloff last week.
Fear & Greed Index:
Caution – Investors are cautiously optimistic but closely watching inflation data and the Fed’s next move.
Key Indices (Closed Prices):
- S&P 500: +1% at 5,554.10
- Dow Jones Industrial Average: +0.3% at 40,861.71
- Nasdaq Composite: +2.1% at 17,391.16
Sector Performance:
- Winners:
- Technology: Tech stocks, led by Nvidia, saw significant gains.
- Losers:
- Financials: Concerns about inflation impacted expectations for aggressive rate cuts.
Key Movers:
- Nvidia (NVDA): Gained over 8% during the day but dipped 0.2% in aftermarket trading.
- S&P 500 Futures: Fell 0.1% to 5,558.0 points in late trades.
- Nasdaq 100 Futures: Slipped 0.1% to 19,252.50 points.
Economic Data:
- Core CPI: The stronger reading on core inflation dented hopes for a larger rate cut by the Federal Reserve. Traders are now pricing in an 84% chance of a 25 basis point cut, down from 66%.
- Producer Price Index (PPI): More data due Thursday, which will give additional insights into inflation trends before the Fed’s meeting.
Outlook:
As inflation remains a top concern, investors adjust their expectations for Federal Reserve rate cuts. While most anticipate a 25 basis point reduction next week, the strong CPI reading has reduced the likelihood of a 50 basis point cut. The market is expected to remain volatile as traders await additional inflation data from the PPI report later in the week