Dow Jones Sets New Record, While Other Indexes Slide
The Dow Jones Industrial Average closed at a new record high on Monday, despite the broader market ending with mixed outcomes. This uptick followed a speech by Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium, which signaled a cautious approach to monetary policy. Market participants are now eagerly awaiting two key events: the July Personal Consumption Expenditures (PCE) Price Index release and Nvidia's earnings report, both set to impact market movements later this week.
The PCE Price Index, a critical measure of consumer spending and a preferred inflation gauge for the Fed, is anticipated to show modest growth from June to July. According to Bill Adams, the chief economist at Comerica Bank, inflation is expected to remain stable or slightly increase year-over-year. However, wage growth is likely to have slowed, given the weaker-than-expected July jobs data.
Durable Goods Orders Surge in July
In economic updates, durable goods orders showed a strong performance. The Census Bureau reported a significant 9.9% increase in July compared to June. Excluding transportation, orders rose 0.2%, while excluding defense orders, they surged 10.4%. José Torres, a senior economist at Interactive Brokers, attributed this growth to a resurgence in jet purchasing, particularly passenger airplanes, along with increased activity in defense aircraft and computers.
Stock Highlights: PDD and XPeng
Shares of PDD Holdings experienced a significant drop, falling 28.5% after releasing earnings reports. Although the Chinese online retailer posted better-than-expected earnings, its revenue missed expectations, partly due to changing consumer demand and rising competition.
Meanwhile, XPeng saw a 7.1% rise following news that its CEO, Xiaopeng He, acquired over 2 million shares, boosting his stake to approximately 18.8%. Despite this insider confidence, analyst Aaron Ho from CFRA Research maintains a Hold rating, citing concerns over competition in the electric vehicle market.
Nvidia and Semiconductor Sector Trends
Nvidia's stock declined 2.3% ahead of its upcoming earnings report. The company's influence on AI spending trends makes its results highly anticipated. As Nvidia approaches the release of its new Blackwell chip, investors are closely watching for any changes in demand narratives.
This decline wasn't isolated, as other semiconductor stocks like Broadcom, Arm Holdings, and Marvell Technology also saw similar downtrends, contributing to a 0.9% fall in the Nasdaq Composite. The S&P 500 also finished lower by 0.3%, contrasting with the Dow's positive performance.
