US stocks experienced a choppy week, with the S&P 500 falling 1.4%, the Dow down 0.9%, and the Nasdaq shedding 2% as investors looked ahead to key events. These include Nvidia's upcoming earnings report, crucial inflation data, and the Federal Reserve's Jackson Hole Symposium, which will offer insights into future rate decisions.
Nvidia's earnings, set for Wednesday, are particularly significant as the company, a key player in AI, faces high expectations. While other tech giants like Microsoft and Amazon showed strong AI investment returns, Meta and Google raised concerns about increased spending. Analyst Frank Lee from HSBC suggests Nvidia could expand its customer base by contributing to open-source AI, potentially propelling the stock further.
Inflation data, specifically the PCE price index, is also a major focus this week. Economists like Goldman Sachs Research's Jan Hatzius anticipate improving pricing pressures, but a higher-than-expected reading could prompt calls for a September rate hike. The Jackson Hole Symposium will further inform the Fed's stance on interest rates, adding to market uncertainty.
The options market, however, has been notably subdued, pricing in a relatively small 4.6% move for Nvidia's stock post-earnings, one of the lowest levels in a decade, according to Citigroup Inc. This indicates a surprising lack of volatility despite the potentially market-moving events on the horizon.
