US stocks are on track to continue their bullish momentum on Tuesday as investors anxiously await comments from Federal Reserve Chair Jerome Powell.
S&P 500 futures saw a modest 0.2% gain, while Nasdaq 100 futures rose 0.4%. Dow Jones Industrial Average futures were relatively stable. The market’s rise has been fueled by signs of an economic slowdown, which have raised expectations of interest rate cuts. On Monday, the S&P 500 posted its 35th all-time high of the year, and the Nasdaq Composite also set a new record, thanks to the strong performance of semiconductor stocks.
Powell will present his semiannual policy update to Congress, beginning with an appearance in the Senate on Tuesday, followed by the House of Representatives on Wednesday. A major consumer inflation report is also expected on Thursday, which could be pivotal for market trends.
Despite the bullish sentiment, there is growing caution regarding a possible market pullback. Morgan Stanley strategist Mike Wilson has predicted a 10% market correction. Wall Street is also wary of the upcoming earnings season due to high expectations. Additionally, there is skepticism about major investments in AI-related stocks, given the technology’s yet unproven impact.
In corporate news, BP’s U.S.-listed shares fell more than 4% in premarket trading after the company warned of a slowdown in refining and a possible writedown of up to $2 billion. Novo Nordisk shares also fell following news that its weight-loss drug Wegovy was outperformed by Eli Lilly’s Mounjaro in a head-to-head study.
Chipotle’s appeal among low-income customers
Despite claims on social media about reduced portion sizes, Chipotle remains popular, particularly among low-income households. Stifel analyst Chris O’Cull noted strong traffic based on mobile location data, leading him to raise his same-restaurant sales projection from 8.5% to 10%. The growth of low-income consumers outpaced that of middle- and high-income consumers, indicating strong value perceptions of Chipotle’s menu across different income levels.
Apple’s market capitalization reaches new heights
Apple’s market capitalization has increased to $3.5 trillion, closely followed by Nvidia at $3.15 trillion. Piper Sandler analyst Matt Farrell highlighted the 30% rise in Apple shares since April, driven by enthusiasm for Apple Intelligence and a possible recovery in iPhone sales in China. While Farrell is optimistic about Apple’s growth prospects, he cautions that the current share price may already reflect much of the positive news, given the high valuation and potential consumer spending challenges.
Also read: Stock Market Update: S&P 500, Nasdaq Rise, Fed Rate Cut Speculation Grows