A paradoxical situation has developed in the U.S. stock market: the S&P 500 index ended trading virtually unchanged, despite the fact that the flagship of the artificial intelligence industry, NVIDIA, presented a report that significantly exceeded the boldest expectations of analysts. The index closed at 7,675.70 points, differing only by a hair's breadth from opening levels, demonstrating an extreme degree of investor caution.
Restraint before the storm
The entire trading session passed within a narrow range. Investors, holding their breath, awaited the publication of NVIDIA's quarterly results, which holds the largest weight in the structure of the S&P 500. The day before, the index rose by 0.32%, reaching 7,677.28 points, thanks to a decline in government bond yields and growth in IT stocks. However, on Wednesday, the momentum fizzled out — the market took a pause, analyzing fresh inflation data.
The core Personal Consumption Expenditures (PCE) price index for July remained at 3.3% on an annual basis, adding 0.2% for the month, which fully matched forecasts. These figures gave the Federal Reserve no reason either to tighten or to ease policy, leaving the question of future rates open. The overall PCE indicator, however, came in 0.1 percentage points above expectations, reaching 3.7% on an annual basis, which added to nervousness.
NVIDIA: success that was not appreciated
NVIDIA shares closed the main session down 1.59% — at $209.66. However, after the report's publication, the stock made a sharp reversal, jumping 4.32% to $218.72. The company's quarterly revenue reached $96.2 billion, up 106% from a year earlier and significantly above the consensus forecast of $92 billion. Earnings per share came in at $2.22 versus the expected $2.09, more than doubling last year's $1.05.
Gross margin remained at an impressive 75%, although the company forecasts a slight decline to 74% in the next quarter. Particularly notable was the growth of the hyperscaler segment, whose revenue doubled to $48.7 billion. The AI cloud, industrial, and enterprise solutions division brought in $40.3 billion — 138% more than a year earlier. CEO Jensen Huang stated that "AI has passed the inflection point," and computing now generates real revenue.
Despite all these impressive figures, the market remained cold. Investors continue to weigh the strong report against concerns about the index being overvalued and its excessive dependence on AI stocks. This is not the first time NVIDIA has beaten Wall Street forecasts but failed to sustain a rise in its share price. Since the beginning of 2026, the stock has gained modestly, sharply contrasting with the dynamics of previous years.
In my view, the market is currently in a consolidation phase, where even flawless fundamental indicators cannot justify inflated expectations. A key trigger for movement could be the speech by Fed Chairman Kevin Warsh at Jackson Hole on Friday. Until then, volatility will likely remain low, and investors will be searching for new reference points.