Following a tumultuous week that saw the stock market swing wildly amid fears of an economic downturn, investors will be closely watching this week’s economic releases, looking for reassurance that the latest turbulence was short-lived and not a precursor of worse things to come.
Aside from Wednesday’s report on the Consumer Price Index, which will give Americans the latest update on inflation, investors will have their eyes peeled on Thursday’s retail sales report as well as the quarterly earnings releases of big box retailers Walmart and Home Depot, which are usually a good indicator of consumer demand.
As our chart shows, this summer has been a rollercoaster ride for investors thus far, with markets seeing some big swings in both directions even before last week’s spike in volatility. Following the AI-fueled rally that saw the S&P 500 climb 14 percent and the tech heavy Nasdaq Composite Index 18 percent in the first six months of 2024, there now appears to be a high degree of uncertainty among investors as to how long this rally can be sustained or whether the valuations of AI stock such as Nvidia are grossly inflated. This leads to a certain jumpiness as every downward move is amplified by fears of the alleged AI bubble bursting.
With all the ups and downs of the past few weeks, things may feel worse than they actually are for investors though. The S&P 500 is down just 2.4 percent since July 1, while the Nasdaq has lost 6 percent during the same period. Both indexes are still up healthily year-to-date though and calmer seas could be ahead, depending on this week’s economic readings.
