The S&P 500 closed last week within about 1% of its August 13 record after a blowout Nvidia earnings report lifted sentiment. Investors now turn to the August jobs report and Broadcom's results to see whether the rally can extend into September.
Jobs data will shape the rate path
The S&P 500 posted a weekly gain, leaving the index just over 1% below its August 13 all-time high. Nvidia's quarterly report on Wednesday boosted the market after the AI bellwether forecast a 70% jump in revenue for its next fiscal year, a rare disclosure for the company.
But attention is shifting to the monthly U.S. employment report due September 4. Economists polled by Reuters expect employment to have climbed by 58,000 jobs in August, with unemployment at 4.1%. That would mark a turnaround from July, when the report showed employment declining by 23,000 jobs.
According to Reuters: "The last jobs report gave the market and investors a little bit of pause", said Amanda Agati, chief investment officer of PNC Asset Management Group.
Following a speech by Fed Chair Kevin Warsh on Friday, investors raised their bets on a rate hike at the Fed's September meeting, as the central bank contends with above-target inflation. Fed funds futures late Friday pointed to a 57% chance of a hike at that meeting, and a hot jobs print showing strong employment and wage growth could push those odds higher.
Broadcom earnings follow Nvidia's blowout
Wednesday also brings Broadcom's earnings report, with the chipmaker's market value last near $1.7 trillion. The results follow Nvidia's report, which lifted equity indexes broadly. Dell Technologies and Palo Alto Networks are also due to report next week as the second-quarter earnings season nears its close.
With most companies having already reported, S&P 500 second-quarter earnings are on pace to climb 34.5% from a year earlier on an adjusted basis, according to LSEG IBES data. The S&P 500 was last up more than 12% for the year, with strong corporate profit growth tied to AI infrastructure spending fueling the nearly four-year-old bull run. Markets have stayed relatively calm as summer ends, with the Cboe Volatility Index hovering near its low point for the year.
Source: Investing.com
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