Another rout hit the market to end a historic lower week, with formerly high-flying technology stocks again taking the brunt, after the August jobs report came in weak enough to add worries about the economy.

The S&P 500 dropped by an awful 95 points to end at 5498 which was its worst week since March 2023. BRCM, NVDA and other tech companies drove the market lower amid ongoing concerns that their prices soared too high in the boom around artificial intelligence, and they dragged the Nasdaq composite down by a market-leading 2.6%.

The Nasdaq made a weak late rally to end 43 points higher as NVDA had the nerve to end around 1 dollar higher after getting blasted lower for the first two days of the week. And how about AAPL and AAPL finally going higher for a change and even GOOG had the nerve to gain, which is somewhat of a miracle with all of the talk about potential antitrust charge against it. And TSLA, of all things, has finally awoken higher this week as well.  

The S&P was down by 24 at the same time and also improved from that level to cut its closing loss to 9 at 5520. Once again, some of the former large technology leaders such as AAPL, which has done really poorly this week, along with NVDA and MSFT, the three largest stocks in the index, were all lower along with the energy group as oil prices fell under $70 after all of the “experts” were saying that the price would be much higher due to the old “major geopolitical risks” situation.

The S&P was a complete downside disaster with a huge 119 points lower to 5529 hurt by one of the worst days for technology in a long time, plus weakness in the financial sector as well. U.S. stocks tumbled Tuesday to their worst day since an early August sell-off, as a week full of updates on the economy got off to a discouragingly weak start.  

The obsessively-watched NVDA, which traded 440 million shares, which has ridden the frenzy over artificial intelligence to become one of the S&P’s most influential companies, was the biggest weight on the market. Its shares fell 6.4% despite stellar results for the second-quarter. The stock, with a total market value topping $3 trillion, is still up 138% in 2024.

The market’s pullback ahead of NVDA’s quarterly results may have been partly due to news about another company tied to AI, namely SCMI.  

The recent upside motivation was the speech by Fed Chairman Powell that interest rates are finally coming down at the September 18th meeting and then there are questions about the health of the consumer and to whether the stock valuations for big tech growth companies like NVDA have become overblown relative to companies’ prospects for future growth. This report will be the elephant in the room for the market.

The market got some positive economic data to mull over Tuesday as the August Consumer Confidence report rose to 103.3 which was the highest since February. Consumer spending accounts for nearly 70% of U.S. economic activity. That has been a strong area of the economy, along with the jobs market.

Monday started off with a surprisingly good report showing that durable goods orders from U.S. factories, including cars, jumped by 9.9% in July. An update on consumer confidence is on tap for today and there will be a revised estimate on Thursday of economic growth during the second quarter.

The key report for investors this week will come on Friday, when the government serves up its latest data on inflation with the PCE, or personal consumption and expenditures report, for July. It is the Federal Reserve’s preferred measure of inflation.

Powell’s speech marked a sharp turnaround for the Fed after it began hiking rates two years ago as inflation spiraled to its worst levels in generations. The Fed’s goal was to make it so expensive for U.S. households and companies to borrow that it slowed the economy and helped bring down inflation.

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The market edged higher once again yesterday after the latest update on inflation came in almost exactly as economists expected.‍

The Dow ended up 242 to 40,008 to finish a day above the 40,000 level for the first time in nearly two weeks. It was led mainly by strength in financials such as AXP, GS, JPM, TRV in addition to UNH.

In another astounding upside day, the market exploded to the upside yesterday with its third-best performance of the year as the July P.P.I. report came in better than expected, which should motivate the Federal Reserve to accelerate its interest rate lowering situation.

The Dow jumped by 408 points to 39,765 led by gains in AAPL, MSFT, UNH and GS as only the energy components sold off. The S&P made a huge gain of 90 to 5434 as the large technology stocks finally all got their act together in a day reminiscent of the first part of the year, when their strong gains led the S&P to 34 all-time highs.

In a session that showed fairly limited final results in the major indices, the market seemed a little quiet after the tremendous volatility from last week.

The Dow, after a higher start, ended lower by 140 down to 39,357 with pressure coming from selling in BA which is going nowhere, GS after its run to all-time highs, HD ahead of its earnings this morning (which were negative) and PG, which has been sort of steady for months now.

Well, well, well – after the 13% downside correction for NVDA, it finally got its act together yesterday and made a nice upside recovery yesterday on huge volume of 400 million shares.

This led to a reversal of the recent pattern where the Dow gained strongly for three sessions while the Nasdaq and S&P got sold off to narrow what had been the historic separation between these items as already mentioned in prior emails.