US stocks slightly higher as week starts; Dow, S&P 500 near record highs

U.S. markets opened higher on Monday morning, with investors focused on results from AI-darling Nvidia (NASDAQ:NVDA ) and a key inflation report due later in the week, amid expectations for a September rate cut from the Federal Reserve.

The S&P 500 was up 0.26% to 5,646 points, while the Dow Jones Industrial Average rose 0.3% to 41,332.01 points.by 09:37 ET (13:37 GMT). The NASDAQ Composite was 0.1% higher at 17, 900.77 points. Nvidia earnings on tap as AI rally falters 

Nvidia is set to report its second quarter earnings after the bell on Wednesday, with focus squarely on whether the chipmaker was able to maintain its pace of stellar earnings growth on a boost from artificial intelligence.

The company, which makes the most advanced AI chips in the market, was a key benefactor of increased interest in AI, more than doubling in value and becoming one of the most valuable companies on Wall Street in the past year.

The results and guidance will be a key test for the AI fuelled market rally this year. They will offer more insights on the state of AI demand, and come after a slew of mixed earnings from other technology heavyweights raised questions over just how much of the stock market gains over the past year were justified. Majors such as Alphabet Inc (NASDAQ:GOOGL ) and Microsoft Corporation (NASDAQ:MSFT ) have fallen after their second-quarter earnings reports. 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 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 September 18 meeting, which would be the first such cut in over four years.

(Ambar Warrick contributed reporting)

Source: Investing.com