Nvidia's AI Results and Warsh's Keynote: A Test for Markets

Nvidia's financial results and Federal Reserve Chair Kevin Warsh's first keynote are on tap this week, and they're being seen as a referendum on the AI trade and the Fed's policy direction.

The rotation out of AI has continued, with semiconductor and data-center names taking a hit over the past five trading days. However, AI-linked infrastructure companies remain responsible for about half of the index's earnings growth, according to Bloomberg.

Athropic's latest revenue topped $11.6 billion in Q2, while OpenAI reported roughly $6.7 billion. Meanwhile, long-term yields have reached 19-year highs due to rising government debt and inflation concerns, despite Treasury Secretary Scott Bessent's commitment to doubling long-end Treasury buybacks.

Warsh has signaled a distaste for forward guidance and wants to frame broader questions rather than focus on near-term policy. However, academic economists surveyed by the FT have expressed concerns over the Fed's communication strategy, with 75% calling it the single biggest shift since Warsh took over.