Wall Street experienced fluctuations after Nvidia Corp.'s earnings report. The S&P 500's exchange-traded fund wavered, and Nvidia's stock fell as its sales forecast of $108 billion (plus or minus 2%) for the current period, while exceeding the average analyst estimate of $105.2 billion, fell short of some higher projections that had exceeded $110 billion. Short-dated Treasuries underperformed, and money markets fully priced in a Federal Reserve rate hike by December, indicating investor sensitivity to anything that might increase the odds of higher rates.
Inflation remains a key concern, with the core personal consumption expenditures price index advancing 3.3% in July from a year earlier, still well above the Fed's target. The U.S. economy grew at an unrevised 1.5% in the second quarter, although consumer spending and business investment were stronger than initially reported. Analysts like Bret Kenwell at eToro emphasized that inflation is "still too high for comfort" and investors are watching for Fed Chair Kevin Warsh's speech at Jackson Hole for policy guidance.
Despite these market movements, consumer income growth is currently outpacing inflation, offering some optimism according to Jeff Roach at LPL Financial. However, policymakers' risk assessment still leans towards inflation. Other tech companies showed varied performance: CrowdStrike Holdings Inc. exceeded revenue estimates due to AI-driven demand, Salesforce Inc. provided a strong revenue outlook and expanded its AI partnership, while HP Inc. investors worried about future demand despite a profit forecast boost. Meta Platforms Inc. agreed to pay up to $18 billion to settle social media claims. The S&P 500, Nasdaq 100, and MSCI World Index were little changed, while the Dow Jones Industrial Average fell 0.2%.
In currency markets, the Bloomberg Dollar Spot Index rose 0.2%. The euro fell 0.2% to $1.1653, the British pound fell 0.4% to $1.3594, and the Japanese yen fell 0.1% to 159.35 per dollar. Cryptocurrencies saw slight gains, with Bitcoin rising 0.4% to $78,497.57 and Ether up 1.5% to $2,472.87. Bond yields increased, with the 10-year Treasuries advancing two basis points to 4.65%, Germany's 10-year yield up three basis points to 3.23%, and Britain's 10-year yield up four basis points to 5.03%. Commodities saw West Texas Intermediate crude fall 0.5% to $81.92 a barrel, and spot gold fell 1.4% to $4,594.14 an ounce.
