Looking for Clues on Inflation, Rates From Warsh
Published as of: August 28, 2026, 9:13 a.m. ET
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(Friday market open) Yesterday put Nvidia (NVDA) squarely in the spotlight. Today shifts focus to the mountains, where Federal Reserve Chairman Kevin Warsh speaks at 10 a.m. ET with mystery veiling his planned Jackson Hole remarks. Stocks were mixed early, directionless ahead of Warsh but up so far this week.
The mystery ends when Warsh's speech gets released, but he reportedly doesn't like being wordy, concerned about moving markets. Analysts wonder if he'll forcefully defend the Fed's 2% inflation goal with inflation above 3%, and if he'll discuss changes in Fed communication policy. "It wouldn't be surprising to see the 'dot plot' or other forms of forward guidance be eliminated," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR).
Major indexes soared Thursday after Nvidia (NVDA) impressed, but tech was the only sector to climb. Next week features earnings from Broadcom (AVGO) and a host of jobs data, crescendoing in next Friday's August nonfarm payrolls report. Early consensus is for a light gain of 45,000 jobs after July's surprise decline.
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Three things to watch
- What else to watch with Warsh: It might help if the Fed chairman outlines thoughts on current rate policy, stuck at 3.5% to 3.75% since last December. Does he view monetary policy as restrictive, accommodative, or neutral? His thoughts on what's driving inflation might also be welcome. Another issue that Warsh is less likely to address but may be the elephant in the room is the recent increase in the size of the Treasury Department's liquidity buyback operations—an apparent effort to address high long-term yields. The Treasury Department and the Fed typically stay in their own lanes, so it would be surprising if Warsh mentioned it, but it does affect yields in a way the Fed can't. Also, Warsh said last month that the bond market was doing some of the Fed's job for it by pushing yields higher, but now the Treasury Department is doing the exact opposite, in apparent conflict with the market. "It clearly puts him in a tough situation," said Collin Martin, head of fixed income research and strategy at SCFR, in the latest Schwab On Investing podcast.
- Earnings box score ahead: Nvidia's results capped a remarkable reporting season, and FactSet issues a fresh scorecard later today. At last look, more than 85% of S&P companies beat analysts' expectations and year-over-year earnings growth topped 50%. That figure was more like 30% subtracting some one-time investment gains by hyperscalers but remains the best in years. The question is whether firms can continue to impress as they lap solid gains. The law of large numbers persists, and there's concern about how long the AI buildout can last amid questions about return on investment for the biggest spenders. Nvidia's guidance for 70% revenue growth in fiscal 2028 soothed fears, but investors likely want to hear similar tidings from Broadcom when it reports. Margin worries for tech persist thanks to chip shortages and high prices. Early this month, investors expected 27.4% S&P 500 earnings growth in the current quarter, FactSet said, and 30% for the full year. Annual growth drops to 13.6% in 2027—historically lofty but easily overshadowed by 2026.
- Consumer spending under microscope after data: Though the key real personal spending measure in this week's gross domestic product (GDP) report rose 3.4%—revised up from the previous 3.2%—there's less there than meets the eye. First, real personal spending was flat in July, its worst month since January. This comes after consumer confidence earlier this week missed expectations. The surliness there might reflect trends underneath the numbers. Many companies have resorted to "shrinkflation"—charging the same amount for less product in a package—or have tinkered with ingredients to cheapen production costs, Bloomberg reported. This includes using higher percentages of water or changing from real cocoa to "chocolate flavor." Consumers are pushing back, forcing some companies to return to their original ingredients. But doing that means eating the margin hit or raising prices. Retailers reporting the last two weeks generally talked about consumer resilience, but there are exceptions, especially in the sportswear and athletic sectors. That said, it might be tougher to rework the innards of a shoe than a chocolate bar.
On the move
- Gap (GAP) climbed 19% after reporting better-than-expected earnings and despite a revenue miss. The company's guidance topped consensus. It also named a new CEO of Old Navy, a brand that's struggled.
- Marvell Technology (MRVL) slid 7% after earnings and revenue came in close to estimates amid strong AI-related demand. The company's guidance was as expected. Investors appeared disappointed that a recent AI chip agreement with Alphabet's (GOOGL) Google didn't have more impact on the outlook, Reuters reported.
- Affirm Holdings (AFRM) soared 12% on solid quarterly results for the financial technology company. Affirm also offered above-consensus guidance.
- PayPal (PYPL) plunged 14% early on a report by Bloomberg that Advent and Stripe had abandoned their $50 billion pursuit of the company.
- Autodesk (ADSK) slipped 4% even though quarterly results surpassed analysts' estimates. The software company guided for third quarter earnings per share below consensus.
- Nvidia (NVDA) inched lower after yesterday's 8.7% gain. With its $5 trillion market cap, this stock alone was a major driver of Thursday's broader market gain. Tech was the only sector up yesterday. Separately, The Wall Street Journal reported that Nvidia has halted certain deals in a new financing effort that offered credit support to AI cloud providers in exchange for a share of revenue.
- Wendy's (WEN) sank more than 13% Thursday after Reuters reported that investment firm Trian has no plans to make a bid for Wendy's right now that would take Wendy's private.
- Circle Internet Group (CRCL) and Coinbase (COIN) each rose nearly 5% Thursday as bitcoin futures jumped another 1.7% to build on this week's sharp gains.
- The S&P 500 Equal Weight Index (SPXEW), which weighs all components the same rather than by market cap, fell 0.29% Thursday and might be a better vector of the session's performance. Volume was light.
- Before Warsh spoke, futures trading priced in just a 36% chance of a September Fed rate hike, according to the CME FedWatch Tool. Chances of at least one hike by the end of the year touched 77%. This could change depending on Warsh's tone.
More insights from Schwab
On Investing: The latest episode looks at a market increasingly shaped by persistent inflation, rising long-term Treasury yields, fiscal concerns, and renewed trade tensions. The episode also previews today's speech by Warsh.
Schwab fund-buying primer: This new video walks investors through the process of buying investments for a portfolio on Schwab.com, including how much to consider allocating to each fund based on years until retirement and risk tolerance.
Options and interest rates: Interest rates are one of several factors that can affect options prices, and the options greek rho helps traders estimate how much an option's value may change when rates move. All else being equal, rising interest rates tend to increase call premiums and decrease put premiums. Learn more in Schwab's latest look at options trading.
Chart of the day
Data source: S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The S&P 500 Equal Weight Index (SPXEW—candlesticks) spent most of yesterday trading lower and finished down 0.29%, this intraday chart shows. This reflects 10 of 11 S&P 500 sectors finishing red Thursday. But the heavily-weighted tech sector lifted the S&P 500 Index (SPX—purple line) by more than 0.7%, reflecting how closely its performance is tied to big names like Nvidia.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
August 31: No major earnings announcements or events.
September 1: July construction spending, August ISM Manufacturing PMI®, July Job Opening and Labor Turnover Survey (JOLTS), and expected earnings from Medtronic (MDT), Palo Alto Networks (PANW), and Dell (DELL).
September 2: August ADP nonfarm employment, July factory orders, Federal Reserve Beige Book, and expected earnings from Broadcom (AVGO), Snowflake (SNOW), Hewlett-Packard (HPE), NetApp (NTAP), and Five Below (FIVE).
September 3: August ISM Services PMI® and expected earnings from Ciena (CIEN).
September 4: August nonfarm payrolls and August unemployment rate.