Wall Street had back-to-back weekly gains and entered an important week with an overbought market. The focus was on Nvidia earnings and the latest reading on the Federal Reserve’s favorite inflation gauge. Fed Chairman Jerome Powell signaled interest rate cuts, leading the market to expect 100 basis points of cuts by the end of the year. The S&P 500 and Nasdaq bounced back after Powell’s speech, each finishing the week up nearly 1.5%. The best-performing stocks of the week were TJX Companies and Palo Alto Networks, with strong earnings and guidance. However, Estee Lauder disappointed, prompting a stock exit.
Earnings season continued with Nvidia reporting fiscal 2025 second-quarter results. The market was optimistic about Nvidia’s growth potential, especially given the capital expenditure spending of its largest customers. Investors were eager to hear about Nvidia’s guidance for the current quarter and feedback on supply and demand dynamics. Another anticipated report was from Salesforce, which faced challenges in the previous quarter. Investors were looking for signs of improvement in the enterprise software industry. Best Buy, which reported solid results in the previous quarter, was also in focus due to the potential impact of AI-equipped hardware on its sales.
The week ahead also featured economic data releases, including the second look at U.S. economic growth in the second quarter and the PCE price index, which is the Fed’s preferred inflation measure. The release of the PCE price index was expected to show an increase of 2.5% year over year for the headline rate and 2.7% for the core rate. Powell expressed confidence that inflation is trending towards the Fed’s 2% target. GDP data was anticipated to remain unchanged from the previous estimate of 3.1% annual growth. The week’s economic calendar also included jobless claims, pending home sales, and consumer sentiment data.
The week’s earnings calendar included reports from companies like PDD, SentinelOne, Box, PVH Corp, Nordstrom, Abercrombie & Fitch, Chewy, Kohl’s, Foot Locker, JM Smucker, CrowdStrike, Affirm, Okta, Pure Storage, Five Below, HP, Dollar General, American Eagle Outfitters, Ollie’s Bargain, Campbell Soup, Dell Technologies, lululemon, ULTA Beauty, Marvell, Gap, Autodesk, and MongoDB. Investors were keen on the updates from these companies as they could provide insight into various sectors of the economy and potential market trends. Jim Cramer’s Charitable Trust was long on Nvidia, Salesforce, and Best Buy, indicating a positive outlook on these stocks.
As a subscriber to the CNBC Investing Club with Jim Cramer, investors received trade alerts before Jim made any trades. Jim followed a specific waiting period after issuing a trade alert before buying or selling a stock in his charitable trust’s portfolio. This protocol ensured transparency and ethical trading practices. Investors were reminded of the terms and conditions, privacy policy, and disclaimer associated with the Investing Club. No specific outcome or profit was guaranteed, and no fiduciary obligation was created by receiving information from the Investing Club.
