Week of 06/17-06/21 NVDA Retracts, S&P 500, Nasdaq, and DOW Manage Weekly Gains

All three market indexes trended lower on Friday, but still managed to close the week in positive territory. Investors are still digesting the Consumer Price Index (CPI) economic data indicating a possible rate cut as soon as September, which would align with most economists expectations. The Federal Reserve has not made any further statements since their FOMC meeting earlier this month and analysts are awaiting next week's Personal Consumer Expenditures (PCE) report to adjust forecasted timeframes. Nvidia stock (NVDA) is in the tech sector spotlight again this week as the company's shares fell sharply during the Thursday and Friday market sessions. NVDA reached a high of $141.80 on Wednesday and closed the week under $127 by Friday's after-hours session. Nvidia's CEO recently sold over $31 million shares to the open market earlier this week, but this doesn't necessarily mean the AI-based rally is over as price targets remain well above the current market price. The U.S. presidential debate next Thursday night will be a topic of interest to investors and traders since views on tax policy, global trade, and the role of the Federal Reserve as well as other economic issues may impact the market sentiment.

What is the PCE report?

The PCE (Personal Consumption Expenditures) report is a key economic indicator that measures the changes in the price of consumer goods and services. It is considered a crucial tool for understanding inflation, as it provides insights into consumer spending patterns and price trends across a wide range of goods and services. The PCE report is particularly significant because the Federal Reserve uses it as a gauge for monitoring inflation and making decisions related to monetary policy.

The report typically includes data on various categories of consumer spending, such as durable goods, non-durable goods, and services. It is released by the Bureau of Economic Analysis (BEA) on a monthly basis, and the data is closely analyzed by economists, policymakers, and investors to assess the overall health of the economy and inflationary pressures.

In addition to the headline PCE index, which measures overall inflation, the report also provides the core PCE index, which excludes the volatile food and energy prices. The core PCE index is often used as a more stable measure of underlying inflation trends.

Overall, the PCE report is an important tool for understanding consumer behavior, price movements, and inflation dynamics, and it plays a significant role in shaping economic policy and investment decisions.