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Nvidia Earnings Just Rescued This Market. Friday Could Undo It.
Nvidia earnings landed Wednesday after the bell, and the number Wall Street needed showed up. Revenue and profit both beat estimates. Guidance topped Street forecasts. Shares jumped 6% to 7% in premarket trading Thursday, snapping a brutal seven-session losing streak that had shaved nearly 12% off the stock heading into the report.
Salesforce jumped 11% to 13%. CrowdStrike gained 9%. The tech trade, which had been bleeding for a week straight, got its pulse back overnight.
One earnings report bought this market some breathing room. Whether that room survives Friday is a different question entirely.
Why Nvidia Earnings Mattered More Than Any Single Company Should
Here’s what made Wednesday night genuinely tense before the numbers landed. Options traders had priced in a 67-basis-point implied move for Nvidia’s report, roughly matching the 65-basis-point move priced for Friday’s Jackson Hole speech. Two catalysts, treated as equally consequential by the market’s own pricing. That’s an unusual level of weight to put on a single earnings call.
“Nvidia’s beat did exactly what it needed to do, it reassured the market the AI investment cycle is still intact,” said Marcus Thorne, Head of Macro Strategy at a New York boutique advisory firm. “But watch what didn’t move much. Core PCE inflation is stuck at 3.3%. That number came in hotter than expected Wednesday morning, and it’s not going anywhere just because Nvidia posted a good quarter. Jensen Huang can tell you AI demand is strong all he wants. He can’t tell you what Kevin Warsh says about interest rates Friday. Those are separate problems, and only one of them got solved this week.”
He’s identifying the real fault line. Nvidia’s stock had fallen for seven straight sessions into this report, and shares had missed the pop investors wanted after each of its last four earnings releases. Bank of America strategist Meriem Hafid flagged the specific risk before the print: if Nvidia disappointed, it risked “recoupling” with a broader market already nervous about rising long-term yields, a risk potentially compounded by a disappointing Warsh speech Friday. Wednesday’s beat removed half of that compound risk. The other half, Warsh, still looms.
The inflation backdrop makes his coming speech harder to read, not easier. The Bureau of Economic Analysis reported PCE rose 0.2% month over month in July, and 3.7% year over year, both hotter than the 0.1% and 3.6% economists expected. Daniela Hathorn, senior market analyst at Capital.com, put it plainly: core inflation stuck at 3.3% “reinforces the idea that disinflation” has genuinely stalled. That’s the exact backdrop nobody wanted heading into a Fed chair’s most closely watched speech of the year.
The 30-year Treasury yield’s behavior this month adds another layer. It surged to multi-decade highs and barely budged even after Treasury Secretary Scott Bessent surprised markets by announcing plans to double long-dated bond buybacks starting in September. If a direct market intervention couldn’t cool that yield, the bar for Warsh’s words alone doing it Friday looks genuinely high.
The Skeptic Who Says Nvidia’s Beat Changes Less Than It Looks Like
Not every strategist thinks Wednesday’s relief rally is the real story, though.
“We’re calling this a rescue, but let’s be precise about what got rescued,” countered Elena Voss, senior equity strategist at a Chicago research shop. “Nvidia’s guidance addressed demand fears. It did nothing for the actual mechanism hurting growth stocks all month, elevated long-term yields raising the discount rate on future earnings. If Warsh disappoints Friday and yields push higher again, Nvidia’s beat becomes a one-day story, not a trend reversal. Options markets priced this Nvidia report and Friday’s speech as equally important for a reason. Only fixing one of those two problems doesn’t fix the market’s actual setup.”
Voss’s caution lines up with the week’s broader data. Jobless claims ticked down to 203,000, a mildly positive labor signal, but South Korea’s central bank hiked rates for a second straight time Thursday specifically to cool rising prices, a reminder that sticky inflation isn’t purely a U.S. phenomenon right now. Beth Hammack, president of the Cleveland Fed, added her own note of caution from Jackson Hole itself, warning that premature comfort “lulls investors into a false sense of security.”
What This Means for Your Portfolio
Here’s the practical read for retail investors navigating the back half of this week.
Nvidia’s report did real work Thursday morning, easing a specific, acute fear that the AI trade’s fundamental demand story was cracking. That’s worth something genuine, not dismissible relief. But it didn’t touch the separate, structural pressure coming from elevated long-term yields, the actual mechanism that’s made growth stocks vulnerable all month regardless of any single company’s quarterly performance.
The practical move: don’t treat Thursday’s rally as confirmation the yield problem is resolved. Watch the 30-year Treasury specifically through Friday’s Jackson Hole speech. If Warsh offers genuine clarity that calms long-dated yields, this week’s relief rally has real room to extend into a broader market recovery. If he stays deliberately vague, as Fedguy.com’s Joseph Wang expects, or if hot inflation data keeps forcing his hand toward caution, expect the yield pressure that’s dogged growth stocks all month to reassert itself fast, Nvidia’s good quarter notwithstanding.
CME’s FedWatch tool currently places nearly two-in-three odds on the Fed holding rates steady in September. That’s the market’s working assumption right now. Friday’s speech is the moment that assumption either gets reinforced or genuinely tested. Position with that binary in mind, not with Thursday’s rally alone.
