Stock market today: Nasdaq set for gains as Nvidia turns a corner
06/25/2024 18:58
Stocks are hoping to add a punchline to what's been a high-flying quarter thus far.
US stock futures held broadly steady on Tuesday with AI chipmaker Nvidia (NVDA) eyeing a cautious comeback from a three-day skid as investors squared away their portfolios for the quarter's end.
Futures on the tech-heavy Nasdaq 100 (NQ=F) moved up roughly 0.5%, while those on the benchmark S&P 500 (ES=F) rose 0.2%. Dow Jones Industrial Average futures (YM=F) slipped 0.1% after surging over 200 points to start the week.
Stocks are looking brighter after the Nasdaq and S&P 500 took a bruising as Nvidia's slide dented the tech rally that has powered gains this year. Investors are seen as taking profits scored in AI-linked names as a stellar quarter draws to a close, raising the question of whether recent losses have further to go.
Shares in the AI darling rose over 2% in premarket trading, coming off a fall of over 6% on Monday.
At the same time, the Dow looks to be finding its feet amid the shift from techs to value stocks, giving weight to the idea of a broadening in gains to other sectors.
Elsewhere, the wait is on for Friday's update to the Personal Consumption Expenditures (PCE) index, a favored inflation input for the Federal Reserve. Governor Michelle Bowman on Tuesday stressed she's willing to hike interest rates if holding them steady fails to bring price pressures under control.
In the meantime, Wednesday brings Case-Shiller's report on home prices in April and a reading on consumer confidence, closely monitored by investors watching for cracks in previous resilience.
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One key market risk for 2025
As if you need another money thing to worry about.
In an exclusive interview with Yahoo Finance's Jennifer Schonberger late Monday, US Treasury Secretary Janet Yellen reminded investors that the Trump tax cuts are set to expire in 2025.
I can't think of the last investor I talked to who expressed a concern about the expiration and how it may impact markets.
But Yellen did her best job to bring this back into the light:
"The signature policy from the Trump years was the Tax Cut and Jobs Act, and it promised an investment boom which really did not materialize. It gave huge tax breaks to corporations and to wealthy individuals. And it resulted in an enormous increase in the deficit and lowered tax revenues below historic norms. And I think it's responsible for many of the problems that we face now with our fiscal trajectory. And so that would concern me to leave all of that in place."
How the markets will react in 2025 should the tax cuts not get extended due to deficit concerns is of course wildly unknown today. It shouldn't be ignored in your investment planning process, however. Consider this alone: No tax cut extension would mean the top tax rate would return to 39.6% from 37%.
That's real money for real people.
You can watch Jenn's full interview with Treasury Secretary Janet Yellen below.
A helpful reminder on Nvidia
While everyone appears to now be an Nvidia (NVDA) expert and is out there waxing poetic on the stock's recent abrupt slide, I will not go that route this morning.
Instead, I wanted to serve up some factual numbers with the help of BTIG's technical analyst Jonathan Krinsky. They provide nice context on why Nvidia shares are taking a little pause.
Here's what Krinsky has to say, as if to remind the masses that stocks don't go up every single day.
"NVDA recently traded ~100% above its 200 day moving average. Since 1990, the widest spread that any U.S. company has ever traded above its 200 day moving average while it was the largest company was 80% by Cisco (CSCO) in March 2000, which marked its all-time high. In other words, NVDA is in a league of its own. It's also notable that at last week's peak, NVDA surpassed Microsoft (MSFT) briefly as the largest U.S. company. On March 24, 2000, CSCO surpassed MSFT briefly to also become the largest market cap company, and that marked the peak of both CSCO and the Nasdaq to the day. While we fully recognize the fundamentals are much different this time around, in the last five years, NVDA is +4,280% compared to CSCO's +4,460% gain in the five years leading up to its peak. Over the last 18 months, NVDA is +827% which is actually double that of CSCO's 18-month gain into '00."
