Nvidia delivered, then Warsh took over: Wall Street's week

Nvidia's data-centre division sold $89bn of chips in three months. That number — up 117% on the same quarter a year earlier, and the centrepiece of results published after the closing bell on Wednesday — is what the entire American trading week was arranged around, and what eventually broke it open.

For three sessions Wall Street barely committed to a direction. The S&P 500 closed Monday at 7,652.86, Tuesday at 7,677.28 and Wednesday at 7,675.70 — a net movement of roughly 23 points, or 0.3%, across three full days of trading, while the market waited on one company. When the figures finally landed, the index rose 0.71% on Thursday to 7,730.99 and the Nasdaq Composite jumped 1.57% to 26,541.35, comfortably its best session of the week.

Then Friday morning the story was handed to somebody else entirely. Federal Reserve Chair Kevin Warsh delivered his first Jackson Hole keynote at 10am New York time, said inflation was running too high, and declined to say where rates go next. This is written with several hours of the American session still to run: what follows treats Monday to Thursday as finished business, and Friday as still in progress.

How the week unfolded

We flagged both of the week's set-piece events in Monday morning's note, before either had happened: Nvidia reporting on Wednesday after the close, and Warsh at Jackson Hole on Friday. Everything in between was the market pricing its way between the two.

Monday was the week's only genuinely negative close. The S&P 500 slipped 0.28% to 7,652.86 and the Nasdaq lost 0.76% to 25,980.19, dragged by chipmakers, while the Dow Jones Industrial Average went the other way, adding 140.15 points, or 0.26%, to 53,417.16. That split — the industrial average up, the technology index down — is the shape of a market cutting exposure to one trade rather than losing confidence in everything. We logged the day's sentiment as Mixed. Two overhangs sat behind it: Treasury Secretary Scott Bessent's new Iran sanctions package, and the 50% American tariffs on roughly $20bn of Canadian goods effective from the weekend.

Tuesday reversed it. Chip stocks led the recovery and we logged Risk-on: the S&P 500 rose 24.42 points to 7,677.28, the Nasdaq gained 171.11 points, or 0.7%, to 26,151.30, and the Dow added 160.24 points to 53,577.40. Nothing had actually been resolved — investors were simply positioning for Wednesday night rather than hedging against it.

Wednesday was where our sentiment turned Cautious, and the reason was inflation rather than chips. The personal consumption expenditures index for July — the gauge the Fed watches most closely, published at 8.30am New York time — came in at 3.7% headline, a tenth of a point above what economists had forecast, with the core measure that strips out food and energy in line at 3.3%. Both were unchanged from June: American inflation has stopped improving rather than merely slowed. The market drifted to a standstill on it. The S&P 500 finished the day 1.58 points lower at 7,675.70, the Nasdaq fell 21.10 points to 26,130.20 and the Dow lost 113.52 points to 53,463.88.

Then the catalyst we had been pointing at since Monday landed, and beat almost every expectation attached to it. In the American convention, big technology companies report after the market shuts so investors have the evening to digest the numbers, and Nvidia used it well. Revenue for its fiscal second quarter came in at $96.2bn, up 106% year on year and around $4bn above the consensus we cited on Wednesday morning; data-centre revenue hit $89.0bn; adjusted earnings were $2.22 a share. The guidance mattered more than the quarter: management pointed to roughly 70% revenue growth next fiscal year, against the 44% analysts had pencilled in.

Thursday was the payoff, and we logged Risk-on again. Nvidia rose almost 9% — its largest one-day gain since April 2025, adding some $442bn of market value — and carried the indices with it. The S&P 500 closed up 0.71% at 7,730.99, the Nasdaq up 1.57% at 26,541.35 and the Dow up 0.20% at about 53,569. The rally was narrow: technology was the only S&P 500 sector to advance, and Nvidia alone more than offset declines across most of the index. The supporting data was calm — initial jobless claims fell to 203,000 and the second estimate of second-quarter GDP was unrevised at 1.5% annualised growth.

Friday, still trading as this is published, has taken the other side. We logged Cautious, and the session has borne that out. Warsh's speech was his first Jackson Hole address as chair — the annual Kansas City Fed symposium in Wyoming where American central bankers traditionally set out their thinking — and he used it to say inflation remains too high and price stability is his predominant concern, while withholding "forward guidance", the signalling of future rate moves markets had grown used to under his predecessors. Stocks were up as much as 0.5% before he spoke; by midday New York time the S&P 500 was down around 0.2%, the Nasdaq around 0.4% and the Dow just below flat. The session does not close until 4pm New York time, so where it finishes is not yet known.

The through-line, then, is a market that spent four days deciding whether the AI trade was still intact, got an emphatic yes, and immediately discovered that the answer was no longer the thing setting prices.

The names that moved it

Nvidia appeared in all five of our daily notes this week, which has not happened often. It fell almost 3% on Monday in the pre-earnings clear-out, rose on Tuesday, and gained nearly 9% on Thursday. For UK holders, the number that matters is not the share move but the guidance: 70% growth projected for a fiscal year running into 2028. Nvidia's fundamentals now carry a meaningful share of the entire index.

Marvell Technology was the week's most instructive counter-example, and the name we flagged second-most often. It reported after Thursday's close with record quarterly revenue of $2.74bn and adjusted earnings of 94 cents a share, both ahead of estimates, alongside a custom-chip agreement with Google potentially worth up to $120bn through fiscal 2033. The stock fell as much as 8% on Friday morning anyway, because investors focused on how many years that revenue takes to arrive. On Thursday, a beat was bought; on Friday, a bigger one was sold. Marvell is the clearest illustration of the week's turn.

Enterprise software produced the two largest single-day gains. Salesforce closed Thursday up around 23% after second-quarter revenue of $11.35bn and adjusted earnings of $5.90 a share against expectations of $3.27, lifting its full-year revenue outlook to $46.1bn–$46.4bn. CrowdStrike rose about 21% on revenue of $1.47bn. HP demonstrated the limits: it fell roughly 10% despite beating on earnings, revenue and raising guidance, punished purely on the outlook for PC and printer demand.

Away from technology, Meta Platforms agreed on Wednesday to pay $16.7bn to settle a lawsuit brought by 29 American states alleging its apps were designed to be addictive to teenagers; subject to court approval, it must impose daily usage limits and overnight blocks on teen accounts. PayPal supplied Friday's sharpest fall, dropping as much as 16% after the Advent International and Stripe consortium abandoned its roughly $53bn, $60.50-a-share pursuit of the company, erasing the takeover premium priced in since April. Retail held up better: Abercrombie & Fitch jumped around 11% on earnings of $4.17 a share against its own $1.80–$2.00 guidance, and Dollar General gained more than 8%. Intuit (down over 9%), Zoom (down over 6%) and Rubrik (down more than 5%) all fell on guidance despite decent quarters — a pattern worth tracking on our screener.

What to watch next week

• Canada's retaliatory tariffs take effect on 8 September, covering American steel, dairy, appliances, farm equipment, pulp and paper and electronics, answering the 50% duties Washington imposed this month. Monday 7 September is Labor Day, a US market holiday, so that deadline falls after a shortened week.
• A further Iran sanctions designation aimed at an unnamed financial institution was flagged by the Treasury as due imminently when "Operation Economic Outcast" was announced on Monday.
• The September FOMC meeting is the next scheduled rate decision. The federal funds rate stands at 3.5%–3.75% after Warsh's only meeting as chair to date, and markets are currently pricing roughly a one-in-three chance of a rise.