The Week Ahead for NASDAQ, Dow Jones and S&P 500


    • The NASDAQ is on a winning streak, having risen for the past eight straight weeks.
    • Tech stocks are seeing new highs thanks to the rise of generative AI.
    • Key economic data on the housing market and broader economy are due out this week.

Stocks have gotten off to a slow start for the week, but from a wider lens, the markets have found some solid footing. For example, the NASDAQ is coming off its best-performing week since March. On a weekly basis, the NASDAQ has been on a tear, rising for the past eight consecutive weeks, thanks to technology stocks fueled by the rise of regenerative AI. 

Nasdaq Composite Chart

Meanwhile, the broader stock market isn’t looking too shabby, either. the S&P 500 has reclaimed its losses from the past year-plus when the Federal Reserve started its aggressive path on interest rates.  The Dow Jones Industrial Average ended last week in the green as investors celebrated the Federal Reserve’s interest rate pause.

Tech Stocks

Whispers of another potential tech bubble have not interfered with a recent rally in tech stocks. While there’s still overhang from high inflation and interest rates, a number of tech stocks are trading in record territory this year. 

Tech bulls are flocking into names like Tesla and Nvidia, the latter of which makes the microprocessors that are used in generative AI. Other names that are benefiting include Meta, which has big plans for generative AI on its social media platforms, Advanced Micro Devices and Apple. 

Investors believe that AI is going to have a transformative role in society in the coming years. However, market professionals including Glenmede’s Jason Pride warn that there are also signs of hype and hope more than long-term potential.

Economic Data

Housing starts for the month of May come out on Tuesday. Economists expect there was some weakness last month after April’s strong results. Wells Fargo predicts this index fell 0.6% in May compared with a 2.2% jump in the prior month due to a recent drop in building permits.

Also, existing home sales for May come out on Thursday, and the outlook is optimistic considering the stabilization in the housing market. Mortgage rates began their descent in early 2023, and this trend is likely to show up in the results. Economists expect there to be a fractional decline in existing home sales for May.

Also on Thursday, the Leading Economic Index data is due, a forward-looking piece of data. While the U.S. economy has managed to stave off a recession so far, this index continues to be weighed down by weak consumer expectations and manufacturing data.