Nvidia Beats Earnings Expectations as Strong PCE Inflation Data Weighs on Market Sentiment

The US stock market closed slightly lower on August 26, as investors remained cautious ahead of Nvidia's earnings release. The Dow Jones Industrial Average fell 0.21% to 53,469.36, while the S&P 500 Index slipped 0.02% to 7,675.70 and the Nasdaq Composite Index declined 0.08% to 26,130.20.

Nvidia's earnings report beat expectations, with second-quarter revenue reaching $96.22 billion, exceeding market expectations of $92.17 billion. Adjusted earnings per share were $2.22, also above market expectations. The company expects third-quarter revenue to be approximately $108 billion, higher than analysts' average expectation.

The US July PCE inflation data came in strong, with the price index rising 3.7% year-over-year in July. This reinforced market concerns that the Federal Reserve will maintain high interest rates or even raise them further. The recent weakness in oil prices was mainly due to ongoing negotiations between Iran and Oman regarding navigation arrangements in the Strait of Hormuz.

The Jackson Hole Economic Symposium is set to begin, with Federal Reserve Chair Warsh delivering a speech. His assessment of inflation, oil prices, fiscal pressures, and long-term interest rates will be closely watched for any implications on market expectations.