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U.S. stocks extended gains in late Monday trading, while the dollar slumped lower against its global peers, as investors looked ahead to a week that will likely be dominated by Federal Reserve headlines and seek clarity on the central bank's autumn rate path.
Updated at 2:52 PM EDT
Touching distance
The S&P 500 was last marked 42 points higher on the session, putting the broadest benchmark of U.S. bluechip shares to within 1.26% of the all-time closing high it reached on July 16.
The Nasdaq, meanwhile, was marked 1% higher on the day, with the Dow rising 192 points and the Russell 2000 up 22 points, or 1.06%.
Remember, it is perfectly normal to see a lot of summer strength in an election year.
— Ryan Detrick, CMT (@RyanDetrick) August 19, 2024
June/July/August are the three strongest months in election years, playing out once again. pic.twitter.com/pPABsn2A8e
Updated at 1:00 PM EDT
It’s the economy, stew-pot
Vice President Kamala Harris would add more detail to her nascent economic plan later this week when she speaks to her party faithful at the Democratic National Convention in Chicago.
Harris, who has edged ahead of former President Donald Trump in national polls but continues to tail him in terms of economic stewardship, is expected to focus on middle class tax cuts, expanded child credit, predatory grocery pricing and medical debt relief.
The broader market backdrop, however, is definitely forming in her favor, with Wall Street banks paring recession forecasts, inflation pressures easing, the job market stabilizing and stocks back within reach of their July all-time highs.
Related: For Kamala Harris, stars align as recession risks fade and inflation slows
Updated at 9:41 AM EDT
Extending gains
The S&P 500 was marked 6 points, or 0.11% higher in the opening minutes of trading, with the Nasdaq slipping 10 points, or 0.09%.
The Dow, meanwhile, added 126 points, while the small cap Russell 2000 rose 7 pints, or 0.1%
"After the S&P 500’s biggest nine-day rally in nearly two years, traders will be wondering whether bulls can maintain the momentum," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley. "With little high-profile economic data in this week’s pipeline, earnings and the Fed may drive the discussion."
"With markets banking on a 0.25% rate cut next month, traders will parse the FOMC minutes and comments coming out of the Jackson Hole economic confab for any insights into the Fed’s longer-term outlook," he added.
S&P 500 Opening Bell Heatmap (Aug. 19, 2024)$SPY +0.15%🟩$QQQ +0.01% 🟩$DJI +0.26% 🟩$IWM +0.50% 🟩 pic.twitter.com/jR2q5XLZ89
— Wall St Engine (@wallstengine) August 19, 2024
Updated at 8:56 AM EDT
Nvidia on deck
Nvidia (NVDA) shares edged higher in early trading following a bullish note from Goldman Sachs ahead of its highly-anticipated second quarter earnings next week .
Goldman Sachs analyst Toshiya Hari, who reiterated his 'conviction buy' rating and $135 price target on Nvidia heading into next week's update, said the demand story remains compelling despite reports of Blackwell delivery delays.
Nvidia shares were last marked 0.1% higher in premarket trading to indicate an opening bell price of $124.70 each, a move would peg the stock's gain from just prior to the carry-trade selloff to just over 16%
Related: Goldman Sachs analyst revisits Nvidia stock price target ahead of earnings
Updated at 8:11 AM EDT
Preserving value?
Estee Lauder (EL) shares slumped in early trading after the luxury cosmetics group forecast muted full-year sales and said its longtime chief executive, Fabrizio Freda, is slated to retire.
The owner of Smashbox, Bobbi Brown and Clinique said 2025 sales would likely fall by as much as 2%, well shy of Wall Street forecasts of a 6.4% gain, with earnings in the region of $2.75 to $2.95 per share.
Estee Lauder shares were last marked 4.2% lower in premarket trading to indicate an opening bell price of $90.97 each, a move that would extend the stock's year-to-date decline to around 40%.
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Stocks now are trending firmly higher, and the S&P 500 is just 2% from the all-time high it reached in July. Investors now are hoping that a September Fed interest rate cut will add further support to a market that has rallied hard since the turmoil of the so-called carry trade unwind that began on Aug. 5.
Comments from Fed officials this week, as well as minutes from the central bank's June meeting and Chairman Jerome Powell's keynote address at the Jackson Hole symposium Friday will combine to provide markets a clearer sense on the direction of interest rates heading into the final months of the year.
At present, the CME Group's FedWatch suggests a 71.5% chance that the Fed will lower its benchmark lending rate by 25 basis points, to between 5% and 5.25%, when it meets next month in Washington. Traders are also pricing in at least two more rate cuts, in November and December.
Benchmark 10-year Treasury note yields were last marked 3 basis points lower from Friday's close at 3.869% while 2-year notes were down 2 basis points to 4.049%.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.23% lower at 102.227.
Fed commentary, as well as data tied to the economy's broader growth prospects, are likely to take center stage this week as the second quarter earnings season draws to a close. Only a handful of blue-chip reports are expected over the next five days, including Lowe's (LOW) , Target (TGT) , Palo Alto Networks (PANW) and TJX (TJX) .
Related: Recession forecasts crushed as economy defies doomsayers
With around 93% of the S&P 500 reporting so far this season, collective profits are set to rise 12.5% from the year-earlier period to $501.5 billion, topping early Wall Street forecasts. Looking into the current quarter, LSEG data suggest a growth rate of around 5.8% and a share-weighted tally of $513.3 billion.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which nudged into positive territory for the month last week, are priced for a 3-point opening bell decline.
The tech-focused Nasdaq, meanwhile, is set for a 30-point pullback while the Dow Jones Industrial Average is called 10 points higher after closing at 40,659.76 points on Friday.
Advanced Micro Devices (AMD) shares were a notable early mover, rising 2.8% to $152.67 after the chipmaker and key Nvidia (NVDA) rival unveiled plans to buy privately owned server maker ZT Systems for around $4.9 billion.
More Wall Street Analysts:
- Analysts reboot Amazon stock price targets after earnings
- Analyst reboots Rivian stock price target on updated plans
- Analysts reboot Arm Holdings stock price target following earnings
In Europe, stocks were mixed as well, with Britain's FTSE 100 slipping 0.13% in early London trading and the regional Stoxx 600 benchmark rising 0.27% in Frankfurt.
Overnight in Asia, a stronger yen and a pullback in chip stocks dragged the Nikkei 225 1.77% lower on the session in Tokyo, with the regional MSCI ex-Japan benchmark rising 0.84% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
