Last week, the tech-heavy Nasdaq and the benchmark S&P 500 both reached all-time highs, through the blue-chip Dow closing over the 40,000 mark on Friday.
In this picture, a smartphone with the NVIDIA logo displayed is placed on a computer motherboard.
Chipmakers helped the tech-heavy Nasdaq to a record high on Monday. This week's the policy of the Federal Reserve meeting minutes and the much anticipated quarterly results from Nvidia will probably put Wall Street's record run to the test.
As expectations for interest rate reduction this year have been bolstered by positive corporate results and softer-than-expected inflation statistics, the three main U.S. indices closed the week higher on Friday.
Last week, the tech-heavy Nasdaq and the benchmark S&P 500 both reached record highs, with the blue-chip Dow closing over the 40,000 mark on Friday.
On Wednesday, investors will be watching Nvidia's quarterly earnings for proof that the leader in AI chips can continue to expand rapidly and outpace competitors. The same day also has the minutes of the Fed's most recent monetary policy meeting planned.
Chief financial strategist at CFRA Research Sam Stovall said, "This week, the question of perhaps we've gone too far, too fast alongside this market move will be on the table."
"The stock's gain will decelerate if (Nvidia's earnings) continue to exceed (markets expectations), but they won't be selling out anytime soon. An AI-driven boom is just getting started, and it will boost not only Nvidia but also a lot of other equities."
At least three brokerages raised their price targets for Nvidia shares, which caused a 2.8% increase in share price. Meanwhile, Micron Technology saw a 4% increase when Morgan Stanley upgraded the memory chip manufacturer from "underweight" to "equal-weight".
Information technology was able to beat the other S&P 500 sector indices as a result.
Given the lack of cues from Fed officials on the timing of rate decreases this year, investors will be analyzing statements made throughout the day by rate-setters Philip Jefferson and Christopher Waller.
While Vice Chair for Oversight Michael Barr said that the current year's inflation data has been "upsetting" so far, Atlanta Fed President Raphael Bostic stated that it would take some time for the U.S. central bank to be certain that inflation is on track for its 2% target.
According to the CME's FedWatch Tool, traders anticipate a 76.2% likelihood of at least a 25 basis point rate drop in September.
Citing strength in corporate results, Deutsche Bank increased its year-end prediction for the S&P 500 to 5,500 from 5,100 points earlier, the highest among the big brokerages. That suggested a gain of about 4% from the previous closing of the index.
Weekly initial jobless claims, S&P global flash PMI readings, and durable goods statistics are all coming this week in terms of economic data.
The S&P 500 was up 17.35 points, or 0.33%, at 5,320.62, the Nasdaq Composite material was up 107.79 points, or 0.65%, at 16,793.76, and the Dow Jones Industrial Average had been down 2.21 points, or 0.01%, at 40,001.38 at 9:57 a.m. ET.
Following news that activist investor Elliott Investment Management had amassed a $1 billion+ stake in the building solutions supplier, Johnson Controls International saw a 3% increase in stock price.
Following a 6% increase in its predicted yearly earnings, Norwegian Cruise Line saw a surge. Carnival Corp. Peer made 4% profit.
On the NYSE, advances exceeded decliners by a ratio of 1.25 to 1, while on the Nasdaq, the ratio was 1.07 to 1.
While the Nasdaq registered 48 new lows and 53 new highs, the S&P index posted 36 new 52-week highs.
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