Dow Jones futures are showing a 0.20% decline a few hours ahead of Monday's opening.

Wall Street is likely to show some correction after the sharp rallies triggered by Fed Powell's Dovish turn.

Nvidia's quarterly earnings, due on Wednesday, and Friday's PCE Price Index figures are likely to drive equities this week.

Dow Jones futures point to a mild pullback from the all-time highs at 45,750 reached on Friday amid the strong risk appetite triggered by Federal Reserve Chairman Jerome Powell’s dovish rhetoric at the Jackson Hole meeting of central bankers.

The major Wall Street indices surged on Friday after Powell pointed to the increasing risks for the labour market and acknowledged the need for less restrictive monetary policies to avert a deep economic downturn.

Inflationary risks, his primary concern to date, took a backseat on Friday. Powell assessed that the base case for a short-lived impact of tariffs looks reasonable, which opens the door for an interest rate cut after September’s Monetary Policy meeting.

Nvidia results and PCE Inflation in the spotlight this week

Later today, New York Fed President John Williams and Dallas Fed President Lorie Logan are likely to give further insight into September’s decision. Before that, US New Home Sales will show the momentum of the property market. 

The highlights of the week, however, will be Nvidia’s quarterly earnings, due on Wednesday, amid increasing doubt about the valuations of AI giants, ahead of Friday’s Personal Consumption Expenditures (PCE) Price Index.

Friday’s PCE inflation is expected to show that inflation continues its uptrend, which might pose a serious challenge for the central bank’s monetary policy setting and trigger a significant reversal in Equity markets.