Wall Street inches up ahead of inflation test

Wall Street edged higher on Monday, continuing an AI-led rally, with investor focus shifting back to key inflation and economic data expected during the week. The release of January’s personal consumption expenditures price index (PCE), the Fed’s preferred inflation gauge, on Thursday could impact the ongoing stocks rally if it indicates persistent price pressures.

The recent artificial intelligence (AI) frenzy, fueled by a robust forecast from chip designer Nvidia (NASDAQ:NVDA), has driven Wall Street to new peaks, overshadowing concerns about a delayed start to the Federal Reserve’s easing cycle.

Last week, the S&P 500 and Dow Jones industrials reached all-time highs, while the Nasdaq approached its record intraday peak from November 2021.

Traders adjusted their bets for the first rate cut, moving it to June from May after higher-than-expected readings on consumer (CPI) and producer (PPI) prices earlier this month.

The market is bracing for the PCE price inflation index, expecting it to show more inflation, aligning with the CPI and PPI numbers.

At 09:35 a.m. ET, the Dow Jones Industrial Average was up 0.18%, the S&P 500 up 0.17%, and the Nasdaq Composite up 0.14%.

Key data on durable goods, consumer confidence, and manufacturing activity are also on investors’ watchlist this week.

Megacap growth stocks, including Nvidia, showed mixed performance. Nvidia continued to outperform, gaining 1.8% after reaching a $2 trillion market value on Friday. Micron Technology (NASDAQ:MU) rose 5.0% as it began volume production of semiconductors for Nvidia’s AI chip.

Berkshire Hathaway (NYSE:BRKa), led by Warren Buffett, rose 2.6% after posting its second straight record annual operating profit.

Domino’s Pizza (NYSE:DPZ) surged 8.4% after beating Wall Street expectations for quarterly same-store sales.

Intuitive Machines fell 25.4% after its spacecraft tipped over on the lunar surface.

Amazon (NASDAQ:AMZN), in its first trading session on the Dow, replaced Walgreens Boots Alliance (NASDAQ:WBA), causing a minor downtick in its stock.

On the NYSE, declining issues outnumbered advancers, while on the Nasdaq, advancing issues narrowly outnumbered decliners. The S&P index recorded new highs, and the Nasdaq had a mix of new highs and lows.