Stock futures are little changed after S&P 500's record high, inflation data looms: Live updates

U.S. equities, including the S&P 500 surpassing 6,500 and the Dow Jones Industrial Average reaching 45,636.90, closed at fresh record highs, primarily driven by renewed investor confidence in the artificial intelligence trade following Nvidia's earnings and positive corporate guidance from companies like Ulta Beauty and Autodesk. This strong performance extends a solid August for all major indexes, with investors now turning their attention to the upcoming July Personal Consumption Expenditures (PCE) inflation data for further market cues.

Analysis

U.S. major indices reached new record highs, with the S&P 500 closing above the 6,500 mark for the first time and the Dow ending at 45,636.90. This rally was primarily fueled by renewed investor optimism in the artificial intelligence sector following Nvidia's quarterly earnings. Although Nvidia's report initially raised some concerns regarding its data center business and its stock finished down less than 1%, the results were strong enough to lift peer chip stocks and reinforce bullish sentiment, with some analysts positioning the AI trend in its early stages. However, the market's strength is not uniform, as demonstrated by divergent after-hours trading. While strong guidance propelled Autodesk up over 11% and Ulta Beauty up approximately 3%, a soft outlook caused Dell Technologies to fall 5%. This backdrop of record monthly gains, including a 3.4% advance for the Dow in August, sets the stage for the upcoming Personal Consumption Expenditures (PCE) inflation data, for which economists forecast a 2.6% annual increase, to be a critical determinant of near-term market direction.

Key Decisions for Investors

• Given the sustained momentum in the AI theme, investors should maintain exposure but exercise selectivity, as the divergence between Autodesk's 11% gain and Dell's 5% drop on guidance highlights that company-specific fundamentals are critical.
• With indices at or near all-time highs and futures showing a slight pullback, it is prudent to monitor the upcoming PCE inflation data closely, as any significant deviation from the consensus 2.6% YoY forecast could trigger market volatility and a potential reassessment of risk.
• The market's mixed reaction to corporate earnings suggests a focus on quality; prioritize companies issuing better-than-expected guidance, as this appears to be the primary driver of outperformance in the current environment.