Nvidia earnings and Warsh’s Jackson Hole debut set to test a market already rotating away from AI

Two forces have defined this summer’s equity landscape: the AI trade that pulled markets higher for months, and the bond market volatility that’s now pulling them back down to earth. Both collide this week in what amounts to a stress test for the entire rally. Nvidia reports quarterly earnings after the bell on August 26. Fed Chair Kevin Warsh delivers his first keynote at the Jackson Hole Economic Symposium on August 28. And sandwiched between them, July PCE inflation data is expected to land at roughly 3.6% year-over-year, a number that won’t make anyone at the Federal Reserve feel relaxed. Nvidia’s 100% growth meets a skeptical market Wall Street expects Nvidia to post approximately 100% year-over-year growth in both revenue and earnings per share. In most contexts, doubling your business in a year would be cause for celebration. In this context, the question is whether doubling is enough. The Philadelphia Semiconductor Index dropped 5.5% in the prior week, dragged lower by rising long-term Treasury yields and a capital rotation out of momentum and tech stocks. Nvidia has functioned as a proxy for the entire AI investment cycle. Its results don’t just tell you about GPU demand. ...