Will Low Stock Market Recover Today?

The major stock market indices all fell before close of trading on Friday, with the Dow Jones dropping 1.01% and the Nasdaq Composite falling 2.55%. Rounding out the top three indices was the S&P 500 with a drop of 1.73%.

This was one of the sharpest drops we have seen from the stock market in a while, and it does not paint a very promising picture for this week. The stock market will be opening soon, and we expect the numbers to continue to look poor.

The S&P 500 fell 4.3% over the last week, which was its lowest week all year. Part of the reason that the market is so low right now is because of the impending interest rate cuts. The Federal Reserve should be cutting those rates later this month. While that could help the economy and increase consumer spending, the fear is that the rate cuts might be too high. Since the Fed has delayed the cuts for so long, they may be inclined to create deep cuts to make up for lost time.

The Market This Week

Because the market fell so dramatically over the last few days, we should see a price correction, but that may not be enough to start a bull trend for the market. Upcoming economic data could help there, and this week wholesale inventories and consumer credit reports are releasing. Those will inform investors about the state of the economy and how businesses and consumers are faring, giving some helpful data that will shift the market.

Recent earnings reports from Hewlett Packard, Dollar Tree, and Kroger are making their impact on the market as well. Even though Walmart helped prove that retail sales were up for the year, Dollar Tree is struggling after its most recent earnings report. Their stock dropped as a result, and that puts a dampener on positive retail numbers.

Major stock favorite Nvidia fell sharply in recent weeks as well. That does not mean the end of the AI market boom, but it does weaken investor confidence in the stock that has done so remarkably well this year. As we get further into September, a traditionally tough month for stocks, we may see more stories like these.