US stocks rebounded from early losses yesterday, following expectations that the Federal Reserve (Fed) will cut interest rates in December.
The S&P 500 index rose 0.2% to 6,768.25 points, the technology-focused Nasdaq rose 0.3% to 25,177.0 points, while the Dow Jones was flat at 47,215.0 points.
All three major Wall Street indexes have fallen sharply over the past two weeks as most investors have lowered expectations that the Fed will cut interest rates next month.
According to CME FedWatch, the market now values a 39.8% chance that the Fed will cut interest rates by 25 basis points at its meeting on December 10-11, down from 61.9% last week.
Market sentiment is now shifting to a cautious approach amid uncertainty over the US economy as the prolonged government shutdown delayed the release of several key economic data.
Despite the shutdown ending last week, officials signaled that October inflation and jobs data may not be released, reducing guidance for the Fed for its December meeting and keeping markets on edge.
The focus this week will be on Nvidia's quarterly earnings for more clues on artificial intelligence (AI) trading and the potential for a tech sector valuation.
Market favorite NVIDIA Corporation is expected to report its fiscal third-quarter earnings on Wednesday, with investors looking for a strong performance this week.
In addition to Nvidia, earnings from major retailers such as Target and Walmart are due on Wednesday and Thursday, while Home Depot, Lowe's, and TJX are expected to provide more clues to U.S. consumers.
