Wall St indexes mixed; Nvidia earnings, Fed policy in focus

By Lisa Pauline Mattackal and Purvi Agarwal

(Reuters) -Wall Street’s main indexes were mixed on Monday, as investors looked ahead to earnings from AI-chip leader Nvidia (NASDAQ:NVDA) following a rout the previous week on apprehensions about Donald Trump’s cabinet appointments and the central bank’s policy path.

Results from Nvidia, which reports third-quarter earnings on Wednesday, will be crucial as investors assess if the euphoria around AI, responsible for much of markets’ tech-driven rally this year, can be sustained. Its stock has nearly tripled in value this year.

Nvidia’s shares fell 2.8%, after a report said its new AI chips were overheating in servers, weighing on the Information Technology sector, which lost 0.3%.

“I’m optimistic that they’re going to continue to beat, but… optimism has been so high on that particular name (Nvidia) that you can’t help but see some potential for a bit of a selloff,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

Meanwhile, Consumer Discretionary stocks gained 1.4% after Tesla (NASDAQ:TSLA) jumped 7.2% following a report that members of Trump’s transition team were seeking to ease U.S. rules for self-driving cars. The EV-maker’s gains also boosted the tech-heavy Nasdaq.

Shares of Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) fell more than 4% each.

Most megacaps edged higher, with Alphabet (NASDAQ:GOOGL) up 0.7% and Apple (NASDAQ:AAPL) up 0.6%.

However, healthcare stocks such as UnitedHealth (NYSE:UNH) and Amgen (NASDAQ:AMGN) weighed on the Dow.

The Dow Jones Industrial Average fell 35.21 points, or 0.08%, to 43,409.78, the S&P 500 rose 5.59 points, or 0.10%, to 5,876.21 and the Nasdaq Composite gained 44.44 points, or 0.24%, to 18,724.56.

Rising expectations that the Federal Reserve will slow its policy easing pace and uncertainty over the impact of U.S. President-elect Donald Trump’s cabinet appointments led to the S&P 500 and the Nasdaq logging their worst weekly losses in more than two months last week.

“The market’s post-election rally tapped the brakes last week,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley (NYSE:MS), adding Nvidia’s earnings would likely dictate the market’s short-term direction.

With the key holiday shopping season set to begin, results from major retailers including Walmart (NYSE:WMT), Lowe’s Companies (NYSE:LOW) and Target (NYSE:TGT) will be closely watched this week to gauge the strength of the U.S. consumer.

Stock indexes have shed some of the sharp gains that followed Trump’s decisive victory, but Wall Street remains fairly well placed as 2024 winds down. The benchmark index has gained nearly 3% in November and about 23% year-to-date.

A host of Federal Reserve officials are slated to speak this week and their comments will be followed closely after Chair Jerome Powell said the Fed was in no hurry to cut rates.

Traders are pricing in a 41.6% chance the Federal Reserve will keep interest rates on hold in December, according to the CME FedWatch.

CVS Health (NYSE:CVS)’s shares gained 2.7% after the health insurer said it would add four new members to its board in an agreement with Glenview Capital Management.

Advancing issues outnumbered decliners by a 1.62-to-1 ratio on the NYSE, and by a 1.31-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and eight new lows, while the Nasdaq Composite recorded 20 new highs and 105 new lows.