The S&P 500 slipped Wednesday after a fresh PCE inflation reading came in hotter than forecast, while the Dow and Nasdaq also lost ground. Investors now turn to Nvidia's after-the-bell earnings and Fed Chair Kevin Warsh's Friday speech at Jackson Hole for the next market catalyst.
The S&P 500 traded down 0.2% on Wednesday after the latest personal consumption expenditures price index reading revealed that inflation remains elevated. The Nasdaq Composite declined 0.5%. The Dow Jones Industrial Average lost 165 points, or 0.3%.
PCE runs hot, core matches forecasts
July's PCE index showed a month-over-month and year-over-year increase of 0.2% and 3.7%, respectively, with both figures 0.1% above what economists polled by Dow Jones had expected. However, core PCE, which excludes food and energy prices, came in as expected with a gain of 0.2% on the month and 3.3% annually.
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said the report wasn't enough to move the needle on Fed expectations: According to CNBC: "It wasn't enough to shift the balance for September's FOMC meeting." Treasury yields inched higher Wednesday after the 10-year yield lost almost 8 basis points Tuesday, even as yields hit multi-year highs last week.
Nvidia earnings loom as market bellwether
Nvidia is set to report second-quarter results Wednesday after the bell, with Wall Street projecting earnings per share of $2.09 on $92.28 billion in revenue, according to FactSet. The report could sway the broader market given the chipmaker is the largest S&P 500 member, with a market cap of more than $5 trillion.
Ulrike Hoffmann-Burchardi, chief investment officer of the Americas and global head of equities at UBS, said the results could stir further volatility as investors look for a robust beat and forward guidance pointing to sustained AI chip demand. Investors are also watching Fed Chairman Kevin Warsh's Friday speech at the Fed's annual symposium in Jackson Hole, Wyoming, ahead of the September rate hike decision.
Ben Fulton, CEO of WEBs Investments, said Warsh could bring some calm if he offers perspective at the symposium, though markets currently lack conviction.
Source: CNBC
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