US stock futures slipped, and bonds remained steady as investors awaited Federal Reserve Chair Kevin Warsh's Jackson Hole address. The market was focused on his comments regarding inflation and how he intends to bring it down to the target. Federal Reserve official Collins noted that interest rates are still mildly restrictive, while Freddie Mac reported a slight rise in US mortgage rates to 6.66%.
Despite the broader market cautiousness, tech stocks experienced a rally driven by Nvidia's strong earnings and outlook. Nvidia's performance fueled bets on artificial intelligence, leading to a significant uplift in the tech sector. This contrasts with a general decline in other sectors and concerns about a potential "regime change" in Fed-Treasury relations that some analysts believe could boost bonds.
Treasury Secretary Scott Bessent's plan to isolate Iran from the global economy also contributed to market caution, particularly affecting chipmakers in the days leading up to Nvidia's earnings. However, Nvidia's subsequent "bumper earnings report and outlook" on Thursday, which projected strong revenue growth and emphasized AI demand, caused its shares to jump and uplifted the broader tech sector, even as other S&P 500 sectors declined.
