Investing.com– The Dow eased from fresh record highs Monday, as the rotation out from tech ahead of Nvidia (NASDAQ:NVDA) earnings into cyclical sectors including financials weighed on the broader market.
At 13:00 ET (17:00 GMT), the Dow Jones Industrial Average rose 0.3% but had eased from a record high of 41,420.05, the NASDAQ Composite was 0.7% lower, the S&P 500 was down 0.2%.
Tech stumbles as rotation trade resume amid rotation out of growth stocks; Nvidia earnings due this week
Tech started the week on the backfoot as investors rotated out of growth sectors of the market, with Nvidia down 1% ahead of its quarterly results due this week.
Apple (NASDAQ:AAPL) was less than 1% lower despite growing anticipation about the iPhone market’s upcoming product launch event due Sept. 9, when many expect it to unveil new iPhones and Apple Watch models.
Adding to the fall in chip stocks, meanwhile, Micron Technology Inc (NASDAQ:MU) fell more than 2% after Needham cut its price target on the stock to $150 from $140, citing concerns over demand.
In Chinese-based tech news, PDD Holdings Inc DRC (NASDAQ:PDD) fell more than 30% after reporting second-quarter revenue that fell short of analyst estimates.
The fall in tech comes as cyclical sectors including financials, which hit 52-week highs on Monday, attracted investor appetite.
Elsewhere, Boeing Co (NYSE:BA) fell more than 1% after Nasa said two astronauts stuck in orbit at the Internal Space Station will return next February on SpaceX-crewed flight following trouble with Boeing’s new capsule.
PCE inflation on tap as Sept rate cut bets build
This week the data-dependent Fed will have a raft of economic indicators to consider ahead of its September rate decision, including the Commerce Department’s revised second-quarter GDP and its broad-ranging Personal Consumption Expenditures (PCE) report, which includes the Fed’s preferred inflation yardstick, the PCE price index.
“The disinflation process continues, and we now estimate core PCE inflation at a 1.9% 3-month annualized pace through July, down from 3.9% in May,” Morgan Stanley said in a Monday note.
The inflation data will be closely watched though recent remarks by Fed policymakers have indicated that the Fed’s focus has shifted toward labor market risks and that inflation is close enough to target to facilitate cutting rates starting next month.
Fed Chair Jerome Powell said Friday that “the time has come” to lower the Fed funds target rate, and “the upside risks of inflation have diminished.” The remarks appeared to all but guarantee a rate cut at the Fed’s Sept. 18 meeting, which would be the first such cut in over four years.
(Noreen Burke, Ambar Warrick contributed reporting)
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