Despite NVIDIA's powerful earnings report, which once again surpassed Wall Street expectations, the S&P 500 index ended the trading session virtually unchanged. The market found itself caught in a web of conflicting signals: strong corporate results clashed with macroeconomic uncertainty and concerns about an overheated technology sector.
The main session for the S&P 500 closed at 7,675.70 points, just a few points away from its opening level. Investors preferred to adopt a wait-and-see stance, analyzing fresh inflation data and refraining from opening large positions ahead of the quarterly report from the market's main favorite—NVIDIA.
Inflation: No Surprises, But No Relief Either
In the morning, data on the core Personal Consumption Expenditures (PCE) price index for July was released. The figure matched analysts' forecasts: 0.2% month-over-month and 3.3% year-over-year. However, the overall PCE index came in slightly above expectations—0.2% month-over-month and 3.7% year-over-year, exceeding the consensus forecast by 0.1 percentage point.
These numbers gave the Federal Reserve no reason to soften its rhetoric, but they also did not heighten alarm on the exchange. Nevertheless, debates over the timing of a future key interest rate cut remain open, adding nervousness to the market.
NVIDIA: Phenomenal Numbers, Restrained Reaction
After the main session closed, NVIDIA presented a report that is hard to describe as anything less than brilliant. Quarterly revenue reached $96.2 billion, up 106% from a year earlier and significantly exceeding forecasts around $92 billion. Earnings per share came in at $2.22 versus the expected $2.09, more than doubling last year's result of $1.05.
Of particular note is the AI cloud and enterprise solutions segment, which brought in $40.3 billion—a 138% increase year-over-year. The company's gross margin remained at an impressive 75%, although management expects a slight decline to 74% in the next quarter. CEO Jensen Huang noted that demand for AI solutions is accelerating, and "AI has passed the inflection point," generating real revenue.
Despite this, NVIDIA shares jumped 4.32% to $218.72 in after-hours trading, but S&P 500 futures reacted modestly. The market, it seems, is beginning to tire of the company's "perfect" reports: justifying the current valuation requires increasingly bold forecasts.
Analyst's View
The situation clearly demonstrates that the market has entered a phase where even flawless corporate results cannot fully offset macroeconomic risks. Investors, taught by the experience of past years, are increasingly worried that the S&P 500 index has become hostage to a handful of technology giants. On Friday, the key event will be the speech by Fed Chair Kevin Warsh in Jackson Hole—it may well determine the short-term direction for the entire market.