Fed Pivot, NVDA And PCE: What Sets Today’s Open

Introduction#

According to Monexa AI, U.S. equities closed Friday with broad-based gains led by cyclicals after Chair Jerome Powell’s Jackson Hole remarks shifted emphasis toward labor-market risks and kept a September rate cut in play. The advance carried major benchmarks to, or near, record territory, while volatility measures stayed contained. Overnight, the policy tone and a lighter global inflation backdrop kept risk appetite constructive heading into Monday’s open. Bloomberg summarized the setup as a data-dependent Fed with a cut now credibly on the table, while Reuters reported that several major brokerages pivoted to forecast a 25-basis-point reduction in September following Powell’s comments. Asia’s session was steadier after cooler Singapore inflation, and European headlines pointed to a tentative pick-up in dealmaking confidence.

The near-term market focus tightens around two catalysts: midweek earnings from NVDA and peer AI/data platforms, and the PCE inflation print later this week. Both could reset expectations for growth, margins, and multiples after the market’s sharp re-rating higher.

Market Overview#

Yesterday’s Close Recap#

According to Monexa AI, the following were Friday’s closing readings or latest prints near the close for the major U.S. benchmarks and volatility indices:

The S&P 500 ended at 6,466.91, up +1.52% on the day and within a whisker of its 52-week high at 6,481.34. The Dow Jones Industrial Average added +1.89% to 45,631.74, tagging a new year high during the session. The Nasdaq Composite advanced +1.88% to 21,496.54, about 1.41% below its 52-week peak. The NYSE Composite rose +1.59% and is similarly near a fresh high. Notably, small-cap volatility (RVX) fell -7.12%, consistent with a risk-on move, while the VIX printed +5.98%. The divergence reflects timing differences in the volatility tape versus cash equities and underscores the importance of anchoring on closing prints when gauging risk appetite; the equity indices and RVX figures above are prior-session closes from Monexa AI, while the ^VIX quote reflects a later timestamp.

Friday’s strength was broad but skewed toward cyclicals, travel, housing, and energy, with Technology continuing to provide index ballast. Monexa AI’s heatmap flagged outsized gains in homebuilding, airlines, freight, and parts of clean energy, against mild to negative moves in staples and select healthcare names. The day’s leadership composition is consistent with a market leaning into the Fed’s pivot and the prospect of easier financial conditions.

Overnight Developments#

Over the weekend and into Monday morning, the macro narrative stayed supportive. Bloomberg characterized Powell’s remarks as opening the door to a September easing subject to incoming data, a framing echoed on its Markets in 3 Minutes segment. Reuters reported that Barclays, BNP Paribas, and Deutsche Bank now forecast a 25-basis-point rate cut at the September FOMC, citing Powell’s heightened concern over labor-market risks. In Asia, Reuters noted that Singapore’s July inflation cooled to 0.6% year over year, below expectations, reinforcing the sense of a gentle disinflation trend globally. Meanwhile, the World Federation of Exchanges and peers urged regulators to crack down on “tokenised stocks,” warning of investor risks and potential market integrity issues, per Reuters.

Market commentary also highlighted concentration and valuation risks: the U.S. market is at or near its most expensive multiple on record after rebounding from the spring tariff shock, according to Monexa AI’s news summary, while margin debt remains elevated. In other words, the macro wind is at investors’ backs for now, but the starting point for valuations is rich—placing a premium on delivery from bellwether earnings and on inflation data not re-accelerating.

Macro Analysis#

Economic Indicators to Watch#

The data calendar is thin early in the week but builds into the PCE price index later on, a release that traders often call the Fed’s preferred inflation gauge. The latest market positioning, as reported by Reuters, implies a 25-basis-point September cut as the modal outcome after Powell emphasized labor-market risks at Jackson Hole. A tame PCE print would harden that expectation and could extend the rotation into cyclicals and small caps; an upside surprise would challenge it and likely revive rate-sensitive factor and sector dispersion at the open and into the close.

Investors should also watch jobless claims and any Fed-speak that follows Jackson Hole as incremental reads on the labor narrative Powell spotlighted. With the market assigning significant weight to a near-term policy pivot, the sensitivity to incremental macro beats or misses is elevated. That applies doubly this week, with indices pressing highs and multiples already stretched by historical standards, per Monexa AI’s news wrap.

Global/Geopolitical Factors#

Tariff policy remains a swing factor for margins and supply chains. Monexa AI notes that the market’s valuation recovery followed a spring tariff shock, and new tariff chatter—from furniture to targeted industrial categories—continues to percolate in weekend commentary such as Barron’s market briefs. Any concrete policy moves would most directly affect Consumer Cyclicals and Industrials, while select retailers already cite tariff headwinds in guidance and analyst revisions. Separately, the push by global exchanges to curtail tokenised equity trading, as reported by Reuters, could have implications for crypto-adjacent venues and may marginally reinforce the competitive moat of incumbent exchanges.

The dollar backdrop also matters at the margin for multinational earnings translation. Monexa AI’s curated news highlights recent dollar softness after Powell’s speech; if sustained, a weaker dollar is typically a modest tailwind for large-cap multinationals’ reported revenues and for commodities, though this week’s equity drivers are likely to remain policy and earnings rather than FX.

Sector Analysis#

Sector Performance Table#

According to Monexa AI, sector performance at Friday’s close showed a classic pro-cyclical tilt, with Energy and Consumer Cyclicals at the top and defensive cohorts lagging:

Energy led with a +3.25% surge, powered by a sharp rally in renewables and strength in oilfield services and integrateds. Monexa AI’s heatmap shows outsized moves in Enphase (+10.41%), First Solar (+5.35%), Schlumberger (+5.32%), Phillips 66 (+4.41%) and Exxon (+1.88%), underscoring that both clean energy and traditional energy participated in the move. Technology’s +1.35% finish masked notable dispersion: semis and hardware outperformed, with NVDA up +1.72% and INTC up +5.53%, while software saw idiosyncratic weakness as INTU fell -5.03% post-earnings outlook.

Consumer Cyclicals’ +1.96% gain reflected risk-on buying across travel, leisure, housing, and autos. TSLA jumped +6.22%, cruise lines rallied (CCL +6.94%, RCL +6.04%), and homebuilding and building products surged (D.R. Horton DHI +5.44%, Builders FirstSource BLDR +8.43%). Industrials rose +1.12% with airlines (DAL +6.66%) and freight (ODFL +6.26%) participating, while CAT gained +4.25% on heavy equipment strength.

Defensive cohorts lagged: Consumer Defensive fell -1.18% with WMT and COST each down -1.15%, signaling a rotation away from staples, while Utilities slipped -0.62% on the day despite pockets of strength (PG&E +3.54%, Edison International +3.33%). Healthcare was fractionally negative, weighed by distribution names (Cencora -3.51%) even as select medtech and tools rallied (ALGN +6.33%, DHR +3.87%, TMO +3.35%).

The Financials tape was broadly firmer (+1.87%). Large banks advanced (BAC +2.53%, JPM +1.64%), private markets outperformed (BX +4.32%), and crypto-exposed fintechs rallied (COIN +6.52%), while exchanges were mixed (CME -1.39%). European headlines about banks staffing up senior dealmakers amid a tentative M&A rebound, reported by Reuters, align with the sector’s improving risk tone and could be a marginal tailwind for advisory-heavy U.S. firms into year-end.

Company-Specific Insights#

Earnings and Key Movers#

The single most consequential micro catalyst this week is NVDA earnings on Wednesday after the close. According to Monexa AI’s news feed and weekend previews at outlets such as Barron’s, the print will be judged on data-center demand sustainability, supply of next-gen platforms, and the trajectory of China-related AI chip sales. With the stock up +1.72% Friday and the market still debating whether AI leaders can grow into elevated multiples, management’s tone on orders, lead times, and product transition will likely sway not just semis but broader tech risk appetite.

In software and data platforms, SNOW reports Wednesday as well. DA Davidson reiterated a Buy and a $250 price target, calling Snowflake a top pick in infrastructure software and citing record developer activity and momentum across data engineering and AI/ML workloads, per Monexa AI’s compilation of broker notes. Consensus expects roughly 25% product revenue growth this fiscal year, with Street focus on remaining performance obligations, large-customer growth, and AI adoption signals. The premium multiple demands continued evidence that Snowpark and Cortex AI are translating into durable consumption growth; if delivery falls short, software multiples across data and analytics could face renewed scrutiny.

MDB reports Tuesday. Monexa AI’s preview pegs consensus at EPS of $0.64 on revenue of about $553.6 million. Given the market’s preference for profitable growth, investors will parse Atlas consumption trends, operating leverage, and any updates on AI-driven workloads. With shares up +3.35% Friday, expectations are constructive but not euphoric; execution on growth and margin expansion remains the bar.

Within collaboration and productivity, ZM rallied +12.71% Friday after a beat-and-raise quarter that showed strong enterprise demand, lower online churn, and a 41.3% operating margin. Several analysts lifted estimates post-release, according to Monexa AI’s news wrap, and the stock’s re-rating case into the fall hinges on whether the growth durability thesis sticks.

Workforce applications were mixed. WDAY fell -2.77% Friday (over -4% premarket at one point) despite a top- and bottom-line beat, as a softer revenue outlook and cautious guidance on the current quarter tempered sentiment; subscription backlog grew a healthy +16.4% year over year, which helps frame the debate around near-term bookings versus long-cycle demand. In tax and accounting software, INTU dropped -5.03% after an in-line fiscal 2026 revenue outlook disappointed investors hoping for a faster re-acceleration; commentary pointed to slowing in its Global Business Solutions Group.

Cybersecurity is seeing renewed competitive sorting. SentinelOne (S was downgraded to Neutral by BTIG on competitive pressures and elevated estimates, per Monexa AI, while platform leaders like CRWD gained +1.57%, reflecting investor preference for scaled ecosystems amid vendor consolidation. The setup argues for selectivity across security ahead of a busy fall calendar.

In Consumer, dispersion is likewise stark. RIVN climbed +8.09% Friday after Needham reiterated a Buy and a $14 target ahead of the R2 mid-size SUV launch, citing favorable brand perception in lower-penetration EV markets and an expanded addressable market at a ~$50,000 price point. The Street will watch pre-order and production timeline updates closely, especially after recent industry-wide supply-chain cost noise. By contrast, American Eagle Outfitters (AEO drew an Underperform downgrade from BofA with a lower target price of $10, citing a longer road to normalized earnings under tariff pressure, softer Aerie sales, and a higher risk of dividend cuts given payout ratios. Shares were up +4.81% Friday on broader retail beta, but the fundamental reset remains a headwind.

Off-price retail continues to find buyers. Ross Stores (ROST gained +1.12% Friday after beating second-quarter expectations and guiding to 2%–3% same-store sales in both Q3 and Q4, despite acknowledging tariff-related cost headwinds. The category’s value positioning remains a relative advantage in a choppy consumer environment. Specialty apparel showed nuance: The Buckle (BKE saw UBS lift its target to $54 (Neutral) after a resilient quarter and strong capital returns but with expectations for moderating margins in the near term.

Financials participated broadly in Friday’s rally, with money-center banks (BAC +2.53%, JPM +1.64%) higher, while private markets outperformed (BX +4.32%). Goldman Sachs (GS was up +3.62% as weekend reporting by Reuters pointed to banks hiring senior dealmakers on improving M&A and IPO confidence—an incremental tailwind to advisory and underwriting fees if activity follows.

Energy breadth stood out. In addition to the clean-energy surge (ENPH +10.41%, FSLR +5.35%), oilfield services and integrateds moved smartly higher (SLB +5.32%, PSX +4.41%, XOM +1.88%). If the Fed follows through with a cut and the dollar remains softer, the energy complex could retain a bid, though investors should expect above-average volatility in solar names where sentiment is particularly momentum-sensitive.

Transportation and housing-linked cyclicals also re-rated. Airlines (DAL +6.66%) and freight (ODFL +6.26%) rallied alongside homebuilders (DHI +5.44%) and building products (BLDR +8.43%), with ancillary lifts in timber REITs like WY (+4.11%). These moves fit a classic early-easing playbook where rate-sensitive, economically levered segments attract flows.

In Communication Services, the ad-driven mega caps did their job: GOOGL gained +3.17% and GOOG +3.04%, while META rose +2.12% amid reports of new smart glasses at the company’s September event. Media beta helped smaller names such as WBD (+4.01%). Telecom lagged, with TMUS down -2.41%. The dispersion here underscores that the sector’s leadership remains concentrated in ad/tech platforms rather than carriers.

Finally, materials and industrial coatings gained ground (DOW +5.97%, LYB +5.95%, STLD +5.50%, SHW +2.49%), reinforcing the capex and reflation tone that typically accompanies early-cycle easing expectations. Gold miners were modestly firmer (NEM +0.97%).

Extended Analysis: Valuation, Breadth, and Risk Management#

Monexa AI’s curated headlines emphasize two tensions that will shape positioning into today’s open. First, the U.S. market’s valuation is historically elevated after Friday’s surge—“the most expensive valuation in history,” per a news summary—at the same time that investor sentiment has moved into the “Greed” zone and margin debt sits at or near records. That backdrop magnifies the payoff (positive or negative) from this week’s core catalysts. Second, market breadth improved meaningfully on Friday, with small-caps finally breaking out of their recent range according to weekend commentary at CNBC, yet leadership remains heavily reliant on mega-cap tech. The result is a cautiously bullish tape: momentum says stay long, but the risk budget should be actively managed.

Practically, that argues for three portfolio disciplines into the open. One, lean into cyclicals and housing/industrial complex exposure where the macro impulse is brightest, but do so via liquid, high-quality leaders and avoid chasing crowded, high-beta moves without a risk plan. Two, keep core exposure to scaled tech platforms where earnings power and balance sheets can support elevated multiples—NVDA, AAPL, GOOGL, META—while recognizing that software is showing greater single-name dispersion on guidance and competitive signaling (INTU, WDAY, S. Three, maintain defensives as ballast even as they underperform; the sector lag in staples and utilities can persist in a risk-on tape, but those positions can amortize drawdowns should PCE or earnings disappoint.

A note on volatility: the conflicting prints between RVX (down into the close) and VIX (a later reading that ticked up) reflect different snapshots rather than a fundamental contradiction. For trading the open, Friday’s risk-on close and the overnight macro tone are the higher-signal inputs. But with indices at highs, the market is more, not less, sensitive to a surprise—particularly from NVDA and PCE.

Conclusion#

Morning Recap and Outlook#

Heading into Monday’s bell, the path of least resistance remains higher, but with a shorter leash. Friday’s tape saw the S&P 500 close at 6,466.91 (+1.52%), the Dow at 45,631.74 (+1.89%), and the Nasdaq at 21,496.54 (+1.88%), per Monexa AI, with cyclicals and semis at the point of the spear. Overnight, Bloomberg and Reuters coverage reinforced the policy narrative of a September cut as a live option, while Asia’s softer inflation print supported the global disinflation trend. The sector lens shows Energy, Consumer Cyclicals, Financials, and Industrials leading, with Technology providing index stability but with rising single-name dispersion, and defensives lagging.

What to watch today and into midweek: first, any incremental Fed-speak as the market calibrates odds of the September move; second, positioning chatter into NVDA and SNOW/MDB earnings; third, early reads on consumer and housing proxies that led on Friday (airlines, homebuilders, and building products) to test the rotation’s durability. Within software, acknowledge the guidance gap—INTU and WDAY remind us that growth narratives can be reset quickly. In retail, off-price (ROST remains the relative winner under tariff headwinds, while mall-based names like AEO face tougher math.

If PCE lands benign and NVDA delivers, the market can extend its breakout. If either disappoints, the tape is vulnerable given valuations, sentiment, and leverage. Active risk management—not maximalism—should define today’s playbook.

Key Takeaways#

• According to Monexa AI, Friday’s close was broadly higher with ^SPX at 6,466.91 (+1.52%), ^DJI at 45,631.74 (+1.89%), and ^IXIC at 21,496.54 (+1.88%). Cyclicals led; defensives lagged.
• Bloomberg and Reuters coverage underscored that a September Fed cut is a live option after Powell emphasized labor risks at Jackson Hole.
• Sector rotation favors Energy, Consumer Cyclicals, Financials, and Industrials; Technology remains a backbone but with greater single-name dispersion in software.
• This week’s swing factors are NVDA earnings and the PCE inflation report; both can meaningfully move multiples and factor leadership.
• Company watchlist: SNOW (DA Davidson Buy, $250 PT), MDB (EPS $0.64, revenue ~$553.6M consensus), ZM (beat/raise, +12.71%), WDAY (softer guide), INTU (FY26 outlook disappointment), RIVN (Needham Buy, $14 PT ahead of R2), AEO (BofA Underperform), BKE (UBS target hike), ROST (off-price strength).
• Valuation is rich and margin debt elevated, per Monexa AI’s news summary, increasing the market’s sensitivity to downside surprises. Keep core longs, but tighten risk controls into catalysts.