Rate Hikes Loom and Nvidia Surpasses Expectations in Historic Quarter

The Federal Reserve is preparing to raise interest rates in response to sustained inflation. Kevin Warsh, a Fed member, reinforced the central bank's commitment to a 2% inflation target, stating that it is 'the Fed's job to deliver stable prices.' However, he acknowledged that the Fed has failed to meet this goal for 65 months.

As a result, markets are pricing in a high likelihood of rate hikes. The market now expects a 60% chance of a hike at the September 16 meeting and a 85% probability by year-end. This would be the first increase since 2018.

Nvidia's record-breaking earnings announcement capped off a historic quarter for the S&P 500, which saw a 52% YoY earnings growth. The chipmaker's revenue surged to $96 billion in Q2, with a projected $108 billion in Q3, representing an 89% increase year-over-year.