Heading into the week on Wall Street: All investors are waiting for this event
On Wednesday, the most important company in the world for AI trading will report, and the entire market is holding its breath. At the same time, Fed Chair Kevin Warsh will appear for the first time at Jackson Hole, and the central bank's preferred inflation index will be released. Everything you need to know before a fateful week on Wall Street.
The coming week on Wall Street is dominated by one prominent event: the quarterly report of Nvidia, which will be published on Wednesday after the market close. This is probably the most important report of the entire season, because Nvidia has become the heat index for the entire artificial intelligence industry.
Alongside the report, the week will also bring the Jackson Hole symposium and the Personal Consumption Expenditures (PCE) price index - all this after a negative week in the markets, where the rise in bond yields put pressure on stocks.
Nvidia, whose chips form the backbone of AI infrastructure, is expected to report revenue of about $92 billion and a profit of about $2.09 per share - figures that are about double those of the same quarter last year. The Data Center sector is expected to account for about 90% of revenue, with the focus being on the adoption rate of the new chip platform, Blackwell.
The stock has jumped about 18% since the beginning of the year and is trading near a record high. "The market is so dependent on AI trading, and Nvidia is the big kid in the room," said Eric Kertz, Chief Investment Officer at Arena Private Wealth. - "It has implications for everything." Recently, Nvidia partnered with six large financial institutions on financing platforms aimed at more than $500 billion for AI infrastructure - a figure that illustrates the huge amount of capital in the field.
On the other hand, expectations are very high, and this is the main risk. Nvidia controls about 80% of the AI accelerator market, but this share is expected to shrink to about 75% by the end of 2026, against the backdrop of independent chip development by cloud giants and increasing competition from AMD. Any sign of a slowdown in demand or pressure on margins could ignite sharp volatility.
The prominent macro event is the Jackson Hole conference (August 27-29), the first appearance of Fed Chair Kevin Warsh since he took office in May. Warsh has retreated from the traditional policy of "forward guidance" to the media and the public regarding interest rate policy, and investors are hoping for hints about his monetary philosophy.
"The risk here is real," wrote Will Sterling of TritonPoint Wealth, estimating that Warsh will repeat the message of data dependence and effectively tell the market to "follow the numbers." The markets are currently pricing in a chance of about 35% for an interest rate hike in September, which rises to about 66% by December.
Before the conference, the PCE index for July will be published, the Fed's preferred inflation index, alongside growth data (GDP). Moderate consumer and producer price data published recently have already lowered the bets on an immediate interest rate hike, but the picture is still far from clear.
The factor that put pressure on the market last week was a jump in bond yields: the 30-year bond yield touched a high since 2007. High yields increase financing costs and compete with stocks, especially sensitive chip stocks. At the same time, oil prices rose for six consecutive days after President Donald Trump threatened sanctions on Iran's trading partners. The S&P 500 index fell about 1.43% for the week and is about 2% below its record, although UBS raised its year-end target for the index to 8,100 points.
Besides Nvidia, other major reports are expected this week. On Wednesday, software giant Salesforce, cybersecurity company CrowdStrike, and HP will also report. On Thursday, chipmaker Marvell will also report, which will provide another reading on AI demand, alongside Workday, Ulta, and the BNPL platform Affirm. At the beginning of the week, PDD (Temu's parent company) and Intuit will report.
Nvidia has a huge weight in the S&P 500 index, which is at the core of pension funds, provident funds, and index funds of the Israeli public. This means that the market's reaction to the report on Wednesday will shake directly into the savings portfolio of millions of Israelis - whether for better or for worse. Interest rate decisions in the US and the direction of bond yields also affect the dollar exchange rate and risk appetite in local markets.
