US stocks are on track to begin the new week on a positive note, rebounding from the steep sell-off that occurred during the week ending September 6. This upward trend is attributed to bargain hunting in technology stocks that had previously taken a hit. However, traders remain wary about the week’s upcoming inflation reports, scheduled for Wednesday and Thursday, as these reports could have significant implications for the market ahead of the Federal Reserve’s rate-setting meeting on September 17-18.
Another crucial event this week will be Tuesday’s presidential debate. Many believe this debate could break the stalemate currently observed between the two leading contenders in the presidential race. Apple’s highly anticipated hardware launch event, known as Glowtime, could inject further momentum into the tech sector. The event features the launch of the new iPhone 16, equipped with Apple Intelligence, a feature widely anticipated to spark a significant upgrade cycle for iPhones. The positive impact of this event, however, remains uncertain, as Apple’s previous launches have often had a neutral or even negative effect on the stock.
Futures markets are reflecting this optimistic outlook. As of Monday morning, the Nasdaq 100 is up 0.98%, the S&P 500 is up 0.78%, the Dow Jones Industrial Average is up 0.66%, and the Russell 2000 is up 0.20%. In premarket trading, the SPDR S&P 500 ETF Trust (SPY) climbed 0.76% to $544.45, while the Invesco QQQ ETF (QQQ) jumped 0.97% to $453.04.
Last week’s market downturn was largely attributed to weak economic data. The abbreviated trading week ended September 6 saw the major averages plummet to their lowest levels since mid-August. This decline was fueled by disappointing manufacturing data and a series of negative labor market reports, including job openings for July, ADP private sector payrolls, and the Bureau of Labor Statistics’ non-farm payrolls report for August. The S&P 500 experienced its worst weekly decline in over a year and a half, according to Marketwatch.
Quincy Krosby, LPL Chief Global Strategist, commented on the market’s struggles, saying, “Markets have had to grapple with – just as the Fed is doing – whether the August payroll data reflects a labor market normalizing towards pre-Covid levels or whether it’s indicative of an economy losing dangerous momentum.” Technology stocks, which had been leading the charge in the current bull run, reversed course, contributing to the overall weakness. Negative reactions to Broadcom Corp’s (AVGO) earnings, a chipmaker heavily invested in artificial intelligence technology, further exacerbated the downturn in the tech sector.
Despite the prevailing uncertainties, fund manager Louis Navellier sees a glimmer of hope. He believes that some of the political distractions and uncertainties will dissipate after the September 10 debate. “The good news is all the political distractions and any uncertainty are expected to diminish,” Navellier said, adding that he anticipates a leading candidate to emerge after the debate. “Our stock market (and homes) allows households to enrich themselves, which in turn fuels more optimism. As a result, America tends to elect a cheerleader as President who will promote the American dream.”
Carson Group Chief Investment Strategist Ryan Detrick maintains his prediction of volatility in the market, but he does not anticipate a sudden, drastic collapse. “No, we don’t expect things to spiral out of control, but after stocks gained 9 of the past 10 months, the odds of seasonal weakness have increased,” Detrick said.
The economic calendar for this week is relatively light, but two key economic reports could have a significant impact on the market. Traders are closely monitoring the August consumer and producer price inflation reports, scheduled for Wednesday and Thursday, respectively. The weekly jobless claims report, the University of Michigan’s preliminary consumer sentiment data for September, and the inflation expectations readings of the same report are also likely to be on traders’ radars ahead of the upcoming Federal Open Market Committee meeting.
On Monday, the Commerce Department will release the wholesale inventories report at 10 a.m. EDT. Economists predict a 0.3% month-over-month increase in July’s wholesale inventories compared to a 0.2% increase in June. The New York Fed will publish its consumer inflation expectations report for August at 11 p.m. EDT. The Treasury will auction three- and six-month bills at 11:30 a.m. EDT, and the Federal Reserve is scheduled to release its consumer credit report for August at 3 p.m. EDT. Economists anticipate an increase in outstanding consumer credit of $12 billion, a faster rate than the $8.9 billion increase observed in July.
Several companies are capturing investor attention this week. Palantir Technologies Inc. (PLTR) surged over 6% in premarket trading after S&P Dow Jones Indices announced the inclusion of the stock in the S&P 500 Index, effective before the start of trading on September 23. Dell Technologies Inc. (DELL) also climbed over 6% on the index inclusion news. Boeing Company (BA) added over 3.70% after reaching an agreement with the International Association of Machinists and Aerospace Workers Union, averting a strike at its facilities in Washington. NVIDIA Corporation (NVDA) saw a modest increase of over 1% following last week’s 14% decline. Apple (AAPL) was up about 0.80% ahead of the iPhone 16 launch. Oracle Corp. (ORCL) is scheduled to announce its quarterly results after the market closes.
In the commodity market, crude oil futures rose over 1%, gold futures remained relatively unchanged, and Bitcoin (BTC/USD) traded just above the $55,000 level, gaining over 1% in the past 24 hours. The 10-year Treasury note yield increased 4.7 points to 3.757%. Most Asian markets retreated in response to Wall Street’s sharp slump on Friday, while European stocks are experiencing a rebound driven by bargain hunting. These gains across the Atlantic come despite the release of some negative domestic data.
