Wall Street experienced fluctuations as traders reacted to Nvidia Corp.'s earnings report. While the S&P 500 and Nasdaq 100 were largely unchanged after regular trading, Nvidia's sales forecast of $108 billion, plus or minus 2%, for the current period, exceeded the average analyst estimate of $105.2 billion, though some projections had been higher than $110 billion. This positive outlook from Nvidia initially supported tech stocks, but broader market caution emerged due to rising bond yields and expectations of a Federal Reserve rate hike by December, fully priced in by money markets.
Economic data released indicated that the core personal consumption expenditures (PCE) price index, excluding food and energy, increased 3.3% year-over-year in July, remaining above the Fed's target. The U.S. economy expanded at an unrevised 1.5% in the second quarter, with stronger consumer spending and business investment than initially reported. These figures contributed to investor concerns that the Fed might be pressured to raise rates, as noted by Ellen Zentner of Morgan Stanley Wealth Management.
Despite these inflation concerns, consumers continue to benefit from income growth outpacing inflation, according to Jeff Roach at LPL Financial. The market is keenly awaiting Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole to understand the Fed's strategy for tackling inflation. In other market movements, the Bloomberg Dollar Spot Index rose 0.2%, while crude oil fell 0.5% to $81.92 a barrel, and spot gold dropped 1.4% to $4,594.14 an ounce. Bitcoin rose 0.4% to $78,497.57 and Ether increased 1.5% to $2,472.87.
