Dow Ignores Stagflation Worries as Nvidia Earnings Loom
The Dow Jones Industrial Average (DJIA) hovered around 53,500 on Wednesday, just under its previous high, after July's core Personal Consumption Expenditures (PCE) revisions came in higher than expected.
The PCE prices rose to 3.7% year-on-year from 3.4%, while the GDP price index increased to 6.4% from 6.3%. This upward revision has raised concerns about inflation and its impact on the market.
Despite this, the DJIA remained relatively stable, with Nvidia's upcoming earnings announcement expected to bring significant volatility to the market. The company is forecasted to report $2.09 a share on approximately $92.28 billion in revenue.
Historically, when long-term yields remain high while equity indices trade near record valuations, the market experiences sharp corrections of up to 10%. The 30-year Treasury rate has recently reached its highest level in nearly two decades at 5.23%.