As investors await Nvidia's earnings, the Nasdaq and S&P close higher

The Nasdaq and S&P 500 closed higher on Monday, partially recovering from recent losses as investors prepared for quarterly earnings from AI leader Nvidia (NASDAQ). Tesla (NASDAQ) also surged following prospects of favorable policy changes linked to the incoming Trump administration.

Nvidia is set to release its third-quarter earnings on Wednesday, with investors keen to evaluate ongoing demand for AI chips and whether the current AI-driven market rally is sustainable. According to BofA Global Research, the chipmaker, which has contributed around 20% of the S&P 500's gains over the past year, is anticipated to drive about 25% of the index's third-quarter EPS growth. However, Nvidia's shares dipped 1.3% after reports surfaced that its new AI chips were overheating in servers.

"Nvidia is the final member of the 'Magnificent Seven' to report earnings, but broader market interest has grown," noted Carol Schleif, chief investment officer at BMO Family Office. "Its report will be significant, but it lacks the same intensity of focus we saw in previous quarters."

The Dow Jones Industrial Average dropped 55.39 points, or 0.13%, closing at 43,389.60. Meanwhile, the S&P 500 rose 23.00 points, or 0.39%, to 5,893.62, and the Nasdaq Composite increased by 111.69 points, or 0.60%, ending at 18,791.81.

Energy stocks led gains within the S&P 500, climbing 1.05%, while consumer discretionary stocks also rose, up 1.04%, driven by Tesla's 5.6% jump after a Bloomberg report indicated that President-elect Trump's transition team might ease regulations on self-driving vehicles. On the other hand, industrial stocks saw the most substantial decline.

CVS Health (NYSE) shares climbed 5.4% following an announcement that the company would add four new board members as part of a deal with Glenview Capital Management.

"Until further clarity emerges from Trump's upcoming cabinet appointments, we could see significant volatility across specific sectors," added Schleif.

While markets have given back some gains following Trump's election victory, Wall Street remains relatively stable as 2024 draws to a close. Concerns over the Federal Reserve slowing its pace of policy easing, combined with uncertainty about Trump's cabinet picks, contributed to the S&P 500 and Nasdaq experiencing their worst weekly declines in more than two months last week.

With the key holiday shopping period about to start, investors will closely monitor results from major retailers such as Walmart (NYSE), Lowe’s Companies (NYSE), and Target (NYSE) to gauge the health of consumer spending.

Advancing stocks outpaced decliners on the NYSE with a 1.71-to-1 ratio, including 159 new highs and 88 new lows. On the Nasdaq, 2,158 stocks rose while 2,150 declined, resulting in a nearly 1-to-1 ratio. The S&P 500 reported 29 new 52-week highs and 13 new lows, while the Nasdaq recorded 69 new highs and 265 new lows.

Trading volume across U.S. exchanges totaled 14.94 billion shares, compared to the 14.12 billion average over the last 20 trading days.

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.