Markets' rally stalls with stock averages and gold near record highs

Dow finished up 9, decliners over advancers 4-3 & NAZ added 29.  The MLP index fell 3+ to the 281s & the REIT index inched up 1+ to the 426s.  Junk bond funds continued a little higher & Treasuries saw a little buying which allowed interest rates to ease high.  Oil was fractionally lower to the 75s & gold was up 4 to 2559 (more on both below).

Dow Jones Industrials 

AI juggernaut Nvidia (NVDA) will report its 2nd qtr earnings after the bell tomorow.  Its announcement, the most anticipated results of the qtr, will send ripple effects throughout the tech sector as investors look for signs that the AI trade will continue to dominate market conversations into the 2nd ½ of the year.  For the qtr, NVDA is expected to report adjusted EPS of 65¢ on revenue of $28.7B.  That works out to a 139% jump in EPS & a 113% increase in revenue compared to the same period a year ago when EPS was 27¢ on revenue of $13.5B.  NVDA is the world leader in AI chip design & software, controlling 80-95% of the market.  And it's expected to continue to hold that lead as it begins rolling out its next-generation Blackwell line of chips.  While The Information has reported about a potential delay in Blackwell shipments, analysts at firms don't see that as much of a concern for NVDA in the near term.  For the qtr, NVDA's all-important data center business is expected to bring in $24B in revenue, a 142% increase from the $10.3B the segment saw in the same qtr last year.  Analysts expect NVDA to not only beat its Q2 expectations but raise its guidance for Q3, something that could be backed up by TSMC's recent earnings beat.  TSMC produces chips for NVDA.  NVDA stock rose 1.84 ahead of earnings.

Nvidia earnings preview: High stakes for the AI trade

Cava (CAVA) shares opened the session in negative territory, after CEO Brent Schulman & other execs reported selling stock.  Schulman reportedly sold 211K shares for $24.9M, Chief Concept Officer Ted Xenohristos sold 98M shares for $12.4M & CFO Patricia Tolivar sold 5M shares for $628K.  The stock sank 7.67 (6%).

Cava stock slides after CEO, executives disclose stock sales

Consumer sentiment in the US continued to improve in Aug with The Conference Board's CB Consumer Confidence Index rising to 103.3 from 101.9 (revised from 100.3) in Jul.  The Present Situation Index rose to 134.4 from 133.1 in the same period, while the Expectations Index edged higher to 82.5 from 81.1.  Assessing the survey's findings, "consumers continued to express mixed feelings in August," noted Dana M Peterson, Chief Economist at The Conference Board.  "Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market."

US CB Consumer Confidence Index improves to 103.3 in August

Gold prices fell, weighed down by higher US bond yields, as markets await inflation data that could shed light on the scale of an expected interest rate cut from the Federal Reserve next month.  Spot gold fell 0.2% to $2512 per ounce, having eased from the record high of $2531 hit last week & US gold futures eased 0.3% to $2547.  The benchmark US 10-year yields rose, making the non-yielding bullion less attractive for overseas buyers.  Investors await data for the Personal Consumption Expenditures (PCE), a key inflation report & the Fed's preferred inflation gauge on Fri.  Traders see a 71.5% chance of a 25-basis-point (bp) rate cut in Sep & about a 28.5% probability of a bigger 50-bp reduction, according to the CME FedWatch tool.

Gold retreats as US yields firm; market awaits further Fed guidance

Oil prices fell 2% on worries that slower economic growth in the US China & could reduce demand for energy, especially after prices surged over 7% during the prior 3 days.  Brent futures fell $1.88 (2.3%) to settle at $79.55 a barrel, while US West Texas Intermediate (WTI) crude fell $1.89 (2.4%) to settle at $75.53.  Today's price pullback, although significant, still fell within range of a normal & deserved correction following a substantial 3-day $6-per-barrel advance.  Technical traders noted that prices of both contracts pulled back after failing to break above resistance around the 200-day moving averages yesterday.  With US gasoline futures still trading near a 6-month low, the 321-crack spread, which measures refining profit margins, held near its lowest level since Feb 2021 for a 2nd day in a row.

Oil Prices Fall 2% on Economic Worries, Technical Decline

The stock averages & gold stayed near breakeven in lackluster trading for most of the day.  With some traders away on long holidays, volume is light & market moves should not be significant (assuming news remains fairly quiet).