S&P 500 retreats from near-record levels, Nvidia slides

By Johann M Cherian and Noel Randewich

(Reuters) -The S&P 500 retreated from near-record highs on Monday, with AI heavyweight Nvidia (NASDAQ:NVDA ) dipping ahead of its quarterly report this week, while investors awaited inflation data for clues about the path of interest-rate cuts by the Federal Reserve.

Nvidia dropped 2.6% ahead of its report on Wednesday in what is set to be the U.S. stock market's most closely watched event of the week.

Some investors worried that anything short of a stellar forecast from Nvidia could shatter Wall Street's rally in AI-related companies, including Microsoft (NASDAQ:MSFT ), Alphabet (NASDAQ:GOOGL ) and Meta Platforms (NASDAQ:META ).

"Nvidia could disappoint. I think when you get to the point where the majority doesn't even suspect that there could be a piece of bad news, that's typically where you get it," warned Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.

U.S.-listed shares of PDD Holdings tumbled 29% after the Temu-owner missed market expectations for second-quarter revenue.

The S&P 500 was down 0.53% at 5,604.90 points.

The Nasdaq declined 1.13% to 17,675.64 points, while the Dow Jones Industrial Average was down 0.04% at 41,160.67 points.

Of the 11 S&P 500 sector indexes, six declined, led lower by information technology, down 1.48%, followed by a 1.06% loss in consumer discretionary.

The energy sector index jumped 1% following reports of oil supply disruptions amid the geopolitical conflict in the Middle East lifted crude prices. [O/R]

Wall Street rallied on Friday, with the S&P 500 nearing record highs after Fed Chair Jerome Powell said "the time has come" to lower borrowing costs in the light of a diminishing upside risk to inflation and moderating labor demand.

Money markets suggest traders see a 70% chance of a 25 basis point interest rate cut and a 30% chance of a 50 basis point cut in September, according to the CME Group's (NASDAQ:CME ) FedWatch tool.

Friday's highly anticipated Personal Consumption Expenditure data for July, the central bank's preferred inflation gauge, could provide more insight into the policy easing trajectory.

Results from Dell (NYSE:DELL ), Salesforce (NYSE:CRM ), Dollar General (NYSE:DG ) and Gap are on tap this week.

Boeing (NYSE:BA ) slipped 0.4% after NASA picked SpaceX over the planemaker's Starliner to return its astronauts from space next year.



Advancing issues outnumbered falling ones within the S&P 500 by a 1.1-to-one ratio.

Across the U.S. stock market, declining stocks outnumbered rising ones by a 1.1-to-one ratio.

Source: Investing.com