US futures rise as rate cut hopes shift, with Nvidia on horizon

U.S. stocks were poised to resume a rally on Monday boosted by the Federal Reserve’s message that interest rate cuts are imminent, ahead of a busy week dominated by Nvidia’s ( NVDA ) earnings report.

S&P 500 futures (ES=F) rose about 0.2%, while Dow Jones Industrial Average (YM=F) futures rose 0.1%. Contracts on the Nasdaq 100 (NQ=F) traded largely on a tech level after the major indexes all gained more than 1% this week.

Stocks are heading for new highs after Chairman Jerome Powell made it clear the Fed is ready to move to lower interest rates in September. The benchmark S&P 500 (^GSPC) is less than 1% away from breaking the closing high set in July.

Markets quickly priced in 1 percent cuts through the end of 2024. But with just three Fed meetings left in the year — in September, November and December — and the August jobs report still to come, Wall Street wonders when and if a 0.5% reduction is likely.

Now, the focus is firmly on Nvidia’s earnings – the highlight of the week – which will likely determine whether the market’s mood remains upbeat. If the chipmaker’s results on Wednesday fail to meet sky-high expectations, that could further hurt the AI ​​trade that fueled the stock’s gains — and in turn could test the market’s recovery from August lows .

Later in the week, an update on Friday to Fed policymakers’ preferred inflation gauge, the PCE print, is likely to feed into the rate calculations. Also on deck is a second-quarter GDP reading on Thursday.