- US equities remain mixed amid tariff uncertainties and inflation risk.
- Nvidia earnings report remain the pivotal event to watch.
- US Core PCE Index is expected to decline to 2.8%, due on Friday.
US equities closed mixed on Monday as investors digested geopolitical risks, economic uncertainties, and Nvidia’s upcoming earnings report. The S&P 500 dropped 0.53%, the NASDAQ fell 1.19%, while the DJIA stayed with a 0.08% gain.
The equities lack directional bias following the last week’s decline with downbeat US retail sales and consumer confidence while inflation remains stubbornly high. Investors are also weighing the federal government’s layoffs and a shifting economic landscape.
The US economic growth and global politics reinforced the cautious mood. The recent German elections have temporarily heightened risk sentiment. However, the Ukraine war and US tariffs keep the risk appetite lower.
Wall Street eagerly awaits Nvidia’s quarterly earnings, due on Wednesday. The chipmaker company that fueled the AI boom, saw a decline of 3% in its share price on Monday as investors positioned them ahead of earnings report.
The results are important for the AI sector and broader market valuations. Gene Goldman from Cetera Investment Management says that markets are shaky and looking for a reason to book profits. Any weakness in the AI sector could spark a sell-off.
The Fed’s preferred inflation gauge Core PCE Index data is due on Friday, which is expected to show a slowdown from 2.8% to 2.6%. However, Trump’s tariffs deteriorate the risk sentiment as investors expect inflationary pressure to mount as a consequence of trade policies. Adding more to the worries, the US consumer inflation survey on last Friday revealed that inflation could surge to 3.5% in next five years, highest since 1995.
The US 10-year yield eased to 4.375% as investors reassessed the growth prospects and inflation risks.
