New York Stock Market Pauses as September Rate Cut Expectations Cool Down

NVIDIA Earnings Announcement: The Biggest Event This Week

Friday's PCE Data Likely to Show an Increase

Last Friday, after Federal Reserve Board Chair Jerome Powell hinted at a possible rate cut next month, U.S. stocks surged, but on the 25th (local time), the market opened with a slight decline.

At 10 a.m. Eastern Standard Time, the S&P 500 was down 0.2%, the Nasdaq fell 0.1%, and the Dow Jones Industrial Average was down 0.3%.

Treasuries, which were strong last Friday, also calmed down as yields slightly rose on this day. Bond prices and yields move in opposite directions. The 10-year U.S. Treasury yield rose by 3 basis points (1bp=0.01%) to 4.28%. The Bloomberg Dollar Spot Index showed little change.

The market weakness reflects expectations that the July Personal Consumption Expenditures (PCE) data to be released this Friday (29th) will show a 2.9% year-on-year rise, the highest in five months.

At the Jackson Hole meeting, Jerome Powell mentioned that the Fed was prepared to implement a rate cut in September amid downside risks to the labor market. However, doubts remain on Wall Street about the pace of rate cuts. While expert opinions are divided, economists expect that the Personal Consumption Expenditures (PCE) data, the Fed's preferred inflation indicator, will not be favorable this week.

The biggest focus of the U.S. stock market this week is NVIDIA's earnings announcement on the 27th. Most Wall Street experts expect NVIDIA to deliver strong results and guidance again for this quarter.

Matt Maley of Miller Tabak said that unless an unexpected significant event occurs, "the most important event this week will be NVIDIA's earnings report and guidance." He pointed out, however, that the likelihood of NVIDIA reporting disappointing numbers or poor outlook is extremely low.

On this day, NVIDIA rose 0.2% to trade at $178. Intel, which saw a 0.5% gain after the White House officially announced last Friday a 10% government stake acquisition, continued to rise as well.

U.S. beverage giant Keurig Dr Pepper (KDP) announced that it would acquire Dutch coffee company JDE Peet's for €15.7 billion (about ₩26 trillion). With this, it aims to create a global coffee powerhouse.

After the acquisition, Dr Pepper will split into two publicly traded U.S. companies, with one focusing on soft drinks and the other on coffee. Following this news, Dr Pepper's stock price plunged nearly 8%.

Bitcoin traded at $111,262.04, down 1.3%. Ethereum, which hit a record high over the weekend, traded at $4,646.05, down 2.9%.

By Kim Jung-ah, Contributing Reporter kja@hankyung.com