Wall Street Retreats After Record Highs as Investors Eye Fed and Tech Earnings

U.S. stocks edged lower on Monday, pulling back slightly after a string of record-setting sessions last week. The Dow Jones Industrial Average slipped nearly 0.8%, the S&P 500 lost about 0.4%, while the Nasdaq Composite eased just 0.2%. Smaller companies also struggled, with the Russell 2000 falling close to 1%.

Fed Policy in Focus

Market sentiment was shaped by expectations that the Federal Reserve could cut interest rates as early as September. Comments made last week by Fed Chair Jerome Powell signaled growing openness to easing policy, boosting optimism that borrowing costs may decline. Still, many traders chose to lock in profits ahead of key data releases later this week, including fresh inflation figures and employment numbers that could influence the Fed’s decision.

Tech Stocks Show Strength

Technology shares once again provided some stability. Nvidia rose around 1% as anticipation builds for its upcoming earnings report, widely seen as a test of the market’s enthusiasm for artificial intelligence investments. Alphabet also performed well, climbing more than 1% and trading near its yearly highs.

Corporate Headlines Move Markets

Several major corporate developments fueled volatility across sectors:

Keurig Dr Pepper plunged after announcing a major acquisition of coffee giant JDE Peet’s in a deal valued at roughly $18 billion. The move will eventually split the company into two separate businesses, but investors reacted negatively, sending shares sharply lower.
Furniture retailers such as Wayfair and RH dropped amid renewed concerns over tariffs on imported goods. In contrast, domestic-focused brands like Ethan Allen and La-Z-Boy saw modest gains.
Crypto-related companies suffered, with shares of digital asset firms falling more than 4% as Bitcoin and other cryptocurrencies lost ground.
Intel slipped after initially gaining on news of increased government backing, as profit-taking set in.

Market Outlook

Despite Monday’s retreat, Wall Street remains on track for its fourth consecutive month of gains. Analysts believe an interest rate cut could provide fresh momentum for stocks, though they caution that overconfidence may trigger sharp swings. All eyes are now on Nvidia’s earnings report and upcoming economic data, which could determine whether the rally continues or faces a deeper correction.