The S&P 500 saw a decline of 0.5% on Monday due to a significant pullback in tech stocks, particularly Nvidia (NASDAQ: NVDA), as investors prepared for a key earnings report scheduled for this week.

Nvidia’s Performance Ahead of Earnings

Nvidia’s stock dropped over 3%, leading the tech sector’s downturn in anticipation of its earnings release scheduled for Wednesday after market closure. Analysts predict a significant quarter fueled by heightened demand for AI chips.

• Wedbush analysts forecast a “clear beat and raise” quarter for Nvidia.

Meanwhile, Apple (NASDAQ: AAPL) rose slightly, supported by a hefty investment announcement for the future regarding AI and advanced manufacturing.

Investor Focus on Economic Data and Political Developments

Investors are closely monitoring essential economic indicators:

• Inflation Data: The upcoming PCE Price Index may sway rate-cut expectations.
• GDP Update: Insights into economic performance will emerge from the second estimate of Q4 GDP.
• Budget Uncertainty: House Republicans’ agendas may introduce market uncertainty.

Market analysts warn that protracted uncertainty in Washington could hamper market growth until clearer directions emerge.

News from Market Leaders

Updates from major players:

• Alibaba (NYSE: BABA) shares fell after announcing a massive investment in AI and cloud computing.
• Berkshire Hathaway (NYSE: BRKa) shares rose despite record profits and increased cash holdings.
• Microsoft (NASDAQ: MSFT) slipped on news about potential cost-cutting measures.

As the earnings season progresses, factors including AI investments and economic shifts will impact market trends.