Key Takeaways
U.S. equities finished last week mixed as strength in artificial intelligence stocks was offset by rising Treasury yields and sustained pressure in oil markets. The S&P 500 closed up 0.13% at 7,408.50, while the Nasdaq Composite fell 0.08% to 26,225.14 and the Dow Jones Industrial Average slipped 0.17% to 49,526.18.
The early week saw continued leadership from AI and semiconductor stocks, with Nvidia and Cisco Systems rallying. However, the macro backdrop worsened into the end of the week as hotter-than-expected producer prices and rising oil prices forced traders to reassess expectations for Federal Reserve rate cuts, leading to a 1.5% drop in the Nasdaq on Friday.
The combination of stubborn inflation and geopolitical tension pressured growth stocks as the 10-Year U.S. Treasury yield pushed toward one-year highs. The S&P 500 faces its first resistance at 7,517.12 with support at 6,917.02, while the Nasdaq Composite has resistance at 26,707.14 and support at 23,698.70. All major indices remain above their rising 52-week simple moving averages, confirming the primary uptrend remains intact.
Looking ahead, the market’s tug-of-war between AI-driven growth and macroeconomic headwinds is set to continue. The week’s focus will be on Wednesday’s Nvidia earnings report for a read on AI infrastructure spending and Thursday’s report from Walmart for insight into the health of the U.S. consumer.
Geopolitical developments remain a key driver of market pricing. Tensions surrounding Iran have kept the Strait of Hormuz largely shut, with a U.S. naval blockade on Iranian ports still active. This has kept upward pressure on crude oil markets, a key input for inflation expectations. The market will be watching Wednesday’s crude oil inventory data for further signals.
After last week’s hot producer price data, investors will closely monitor commentary from the Federal Reserve for guidance on inflation and the path for interest rates. The week is loaded with Fed-related events, including speeches from multiple FOMC members and the release of the FOMC Meeting Minutes on Wednesday. This commentary will be critical in shaping expectations for the timing of any future rate cuts.
Beyond Nvidia and Walmart, the earnings calendar offers a broad look at the economy. Reports from retailers like Target, Home Depot, and Lowe’s will provide more color on the consumer. Meanwhile, results from Deere, Analog Devices, and Workday will offer perspectives on the industrial, semiconductor, and enterprise software sectors, respectively.
This article is for informational purposes only and does not constitute investment advice.
