Dow jumps amid broader market rally in countdown to inflation data
Fed's preferred inflation PCE data due on Friday
Nvidia on track for third straight declining session
Indexes: Dow up 0.58%, S&P down 0.13%, Nasdaq down 0.83%
Updated at 2:03pm ET/1703 GMT
By Ankika Biswas, Lisa Pauline Mattackal and Carolina Mandl
June 24 (Reuters) - A broad stock market rally pushed the blue-chip Dow to a one-month high on Monday, as investors rotated out of AI-linked stocks and added some laggards to their portfolios, betting on Federal Reserve interest rate cuts this year.
Nvidia NVDA.O slid for a third session, down5.4% as market watchers cited profit taking in the semiconductor bellwether after its meteoric rise last week to theworld's most valuable company.
Other chip stocks including U.S. shares of Taiwan Semiconductor Manufacturing TSM.N, Broadcom AVGO.O, Marvell Technology MRVL.O and Qualcomm QCOM.O dropped between 2.1% and 4%, dragging the chip stocks index .SOX down 2.3%.
"The market's selling some of the winners and buying some of the laggards here," said Jack Janasiewicz, lead strategist at Natixis Investment Managers. "It's a little bit of a nod to looking out over the inflation data that is coming out on Friday, as expectations are for a pretty soft print."
Technology .SPLRCT and the consumer discretionary were the only two decliners among the 11 S&P 500 sector indexes. Meanwhile, the energy sector was up 2.5%.
The Dow Jones Industrial Average .DJI jumped over 0.5% intraday, on course for a five-day winning streak. The small-caps index Russell 2000 .RUT also hit its highest in over a week, signaling broader market gains.
"If inflation comes in softer, the market could broaden out quite significantly... The breadth will get wider and everything beyond the AI stocks," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
The biggest event on investors' radar for the week is Friday's personal consumption expenditures (PCE) price index report, the Fed's preferred measure of inflation, expected to show a moderation in price pressures.
Investorsstill expect about two rate cuts this year, pricing in a 61% chance of a 25-basis-point cutin September, asper LSEG's FedWatch. The Fed's ownlatest projection is forone rate cut likely in December.
At 02:03 p.m. the Dow rose 225.94 points, or 0.58%, to 39,376.27, the S&P 500 .SPX lost 6.84 points, or 0.13%, to 5,457.78 and the Nasdaq Composite .IXIC lost 147.38 points, or 0.83%, to 17,541.98.
Other data this weekinclude durable goods, weekly jobless claims and final first-quarter GDP figures, the annual Russell index reconstitution. Some quarterlyearnings reports also are due.
On Thursday, PresidentJoe Biden will debate Republican rivalDonald Trump in Atlanta, which could influence the outcome of a race for the November election that opinion polls show as neck-and-neck.
Meta Platforms META.O rose 0.23% aftera report the Facebook parent has discussed integrating its generative AI model into Apple's AAPL.O recently announced AI system for iPhones. Apple's shares also climbed 0.77%.
RXO RXO.N leapt over 21% on plans to buy United Parcel Service's UPS.N Coyote Logistics business unit for $1.025 billion.
Advancing issues outnumbered decliners by a 2.27-to-1 ratio on the NYSE. There were 141 new highs and 39 new lows on the NYSE.
The S&P 500 posted 33 new 52-week highs and one new low while the Nasdaq Composite recorded 41 new highs and 101 new lows.
Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru, and Carolina Mandl in New York; Editing by Maju Samuel and David Gregorio
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