Market Pulse: Market Outlook | June 25, 2024

As summer kicks in, the market’s vibe is shifting, especially with Nvidia cooling off after its big run. June usually isn’t a strong month, so seeing some underperformance isn’t surprising. Today’s main focus is consumer confidence data, which will shape market sentiment. We’re also watching how international economies and central banks are behaving, especially since global banks are easing while the U.S. holds steady.

Nvidia’s recent dip, though not unexpected, is notable for its speed. The stock is now eyeing $120 as a crucial support level, and falling to $100 could mean a bigger drop.

There’s a lot of talk about whether the market can find strength beyond the AI hype. Bitcoin’s recent bounce shows some risk-on sentiment, but its earlier struggles, even when the market hit new highs, highlight a lack of broad speculative interest. This reflects concerns about inflation and the Fed’s inability to cut rates, limiting a broad rally.

The equal-weighted S&P 500 has shown some strength, suggesting an interest in more diversified investments. However, this needs a stronger economic story to sustain it. Persistent inflation and mixed data don’t support a strong move into cyclical sectors.

The yield curve’s flat state signals ongoing caution about the economy. A flat or inverted curve typically means worries about a slowdown or recession, so it’s important to watch this closely to understand market expectations.

In summary, the market is facing challenges as June progresses. Nvidia’s pullback could reveal broader market weaknesses, especially if key support levels break. Economic indicators, central bank policies, and potential sector rotation will be crucial in determining market direction. Stay alert to key levels and economic data, and be prepared for potential volatility in the coming weeks.