Nvidia in focus as a macro date with destiny approaches

Markets

The Dow Jones Industrial Average hit an all-time high on Monday, even as the tech behemoths decided to take a breather, leaving U.S. stock indexes with a mixed finish. The S&P 500 slipped 0.3%, flirting with its July record, just 0.9% away. Meanwhile, the Nasdaq took a 0.9% stumble, dragged down by the usual suspects—Nvidia, Microsoft, Amazon, Meta Platforms, and Tesla—all of whom decided to hit the snooze button on their recent rallies.

But let’s not overlook the silver lining: this shift actually backs up the broader market rotation thesis. As the tech giants take a breather, small-caps have seized the moment, basking in their time in the spotlight. It's a healthy sign that the market's not just a one-trick pony, and there's still plenty of opportunity across the board.

As we approach Nvidia’s highly anticipated earnings report—arguably the most significant of 2024—tech investors are understandably on edge. Powell’s dovish signals on Friday seemed like an open invitation to double down, but Mega Cap Tech opted for some profit-taking instead. The bulls aren’t resting easy just yet; there’s a lot of nervous pacing as they question how much fuel is left in the earnings tank and whether the Fed’s rate-cutting spree will be enough to keep the broader Magnificent 7 from crashing back down to Earth with a thud.

The real question on every cross-asset trader’s mind is whether Powell’s dovish dance will keep the market party going or if we’re in for a cold dose of reality.

With the market still lounging in the dog days of summer ahead of month-end rebalancing, making any bold predictions feels like flipping a coin. Nvidia’s earnings could either lift all boats or send the whole fleet to the bottom. And let’s not forget the looming data minefield—there’s a macro date with destiny as the next big market move likely hinges on the NFP report. Historically, layoffs hit like a tidal wave, and when they do, you can’t just wave them away. Economists may be shouting from the rooftops that we’re not in a recession, but if they’re right and the employment data stays solid, expect markets and central bankers to scramble to drain the punch bowl once again.

Oil markets

Oil prices are climbing as Libya declares force majeure over the central bank's murky handling of oil revenues. Escalating tensions in the Middle East and Eastern Europe are also adding to the mix and fueling the "tinderbox hedge."

This trifecta of geopolitical stressors is sparking bullish sentiment, setting up what promises to be another wild ride for oil markets.