Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, July 20, 2023.
Brendan McDermid | Reuters
Stocks were flat Monday after key stock benchmarks reached record highs and investors awaited inflation data slated for release later this week.
The Dow Jones Industrial Average rose 68 points, or 0.2%, while the S&P 500 added just 0.03%. The Nasdaq Composite gained 0.2%.
Amazon joined the 30-stock Dow on Monday, replacing Walgreens Boots Alliance. The Dow’s holdings are weighted according to stock price, not market cap. The addition of the e-commerce giant will increase the index’s exposure to tech and consumer retail. Amazon shares were 0.1% lower Monday.
Stocks are coming into the final week of February on a high note after the major indexes achieved key milestones and registered winning weeks with help from Nvidia’s blockbuster earnings.
Investors are now watching whether the AI momentum can last as economic and inflation risks linger. With that in mind, they’re also looking ahead to the monthly personal consumption expenditures price index, the Fed’s favored inflation gauge due out Thursday.
For the time being, the AI-powered rally appears sustainable, according to Alex McGrath, chief investment officer at NorthEnd Private Wealth.
“Where Nvidia and a lot of other semiconductor companies guided to seems to have put some credence into the thought that AI can continue to power this rally,” said McGrath.
Investor sentiment has towards stocks has risen thanks to a better-than-expected earnings season, according to Oppenheimer chief investment strategist John Stoltzfus. This comes “even as markets have had to digest the likelihood that the Federal Reserve will remain highly vigilant regarding sticky inflation when it comes to considering if, when, and by how much it might cut interest rates this year.”
There’s a raft of economic releases on deck, including January durable orders data on Tuesday and January wholesale inventories on Wednesday. Consumer spending and PCE numbers will come out on Thursday.
The blue-chip Dow closed at an all-time high, the S&P at one point in the session broke above 5,100 for the first time, and the tech-heavy Nasdaq Composite touched a 52-week high in Friday’s session.
