Wall Street spent most of the session doing what it does best when two big catalysts collide: nothing. The Dow Jones Industrial Average slipped roughly 0.2% on August 26, while the S&P 500 and Nasdaq Composite barely budged, as traders sat on their hands ahead of Nvidia’s quarterly earnings and digested an inflation report that ran hotter than anyone wanted.
The July inflation rate came in at 3.7%, a touch above expectations. That number alone wouldn’t normally cause a market-wide freeze, but with Fed Chair Kevin Warsh’s Jackson Hole speech looming, investors had little appetite to make bold bets in either direction.
Nvidia delivers a statement quarter
If the regular session was a waiting game, after-hours trading was the payoff. Nvidia posted Q2 revenue of $96.22 billion, more than doubling its year-ago figure and sailing past analyst estimates of roughly $92 billion.
The star of the show, as usual, was data centers. That segment alone brought in $89 billion, a 117% jump from the prior year.
Shares popped more than 4% in extended trading as investors parsed the numbers and found very little to complain about. CEO Jensen Huang offered bullish remarks on the company’s forward trajectory, and the guidance backed it up: Nvidia projected Q3 revenue of approximately $108 billion and forecast around 70% revenue growth for fiscal 2028.
Inflation complicates the picture
A 3.7% annual inflation rate for July sits in an uncomfortable zone. It’s not high enough to trigger panic, but it’s sticky enough to keep the Federal Reserve from loosening its grip on monetary policy anytime soon.
The reading gains extra weight given its timing. Warsh’s Jackson Hole appearance has been widely anticipated as a moment for the Fed to signal its next moves. A cooler inflation print might have given the central bank room to talk about rate cuts. Instead, the 3.7% figure hands the Fed a reason to stay patient, or worse, sound hawkish.
Growth stocks, which tend to be more sensitive to interest rate expectations, traded cautiously throughout the day. The Nasdaq’s marginal losses reflected a market that wanted to be optimistic about AI spending but couldn’t ignore the macro backdrop.