The Nvidia Effect: AI Giant's Results Lift Stocks
Published as of: August 27, 2026, 9:09 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,675.70 | -1.58 | -0.02% |
| Dow Jones Industrial Average® | 53,463.88 | -113.52 | -0.21% |
| Nasdaq Composite® | 26,130.20 | -21.10 | -0.08% |
| 10-year Treasury yield | 4.66% | Unch | -- |
| U.S. Dollar Index | 99.20 | +0.04 | +0.04% |
| Cboe Volatility Index® | 15.07 | -0.14 | -0.92% |
| WTI Crude Oil | $82.46 | +$0.23 | +0.28% |
| Bitcoin | $79,280 | +$760 | +0.97% |
(Thursday market open) Nvidia (NVDA) more than impressed with its latest quarterly results, leaping 6% and giving Wall Street an early lift. The Nasdaq Composite climbed almost 1% as the AI giant's annual revenue doubled, which analysts had expected.
But it was the company's solid guidance projecting strength into 2028 that truly did the trick for tech. And Nvidia wasn't alone. Software bellwethers Salesforce (CRM) and CrowdStrike (CRWD) also impressed with their quarterly showings, putting software and chips on the same page for once. Fed Chair Kevin Warsh brings the week's final act tomorrow in Wyoming.
Stocks flattened Wednesday as investors digested slightly bearish inflation data. Still, things look constructive technically. "We're holding ground above the 50-day simple moving average on the Dow, Russell 2000®, and Nasdaq Composite, and the S&P 500 Equal Weight Index is less than 1% below all-time highs," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR). "I don’t see anything concerning from a near-term technical perspective, and we appear to be in a sideways consolidation period for stocks."
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Three things to watch
- Nvidia earnings deeper dive: The numbers may be familiar, but bear repeating. Nvidia delivered another beat-and-raise quarter, posting earnings of $2.22 per share on revenue of $96.2 billion. It also guided for between $105.8 billion and $110.6 billion in third-quarter revenue, above the $104.8 billion analysts had expected. Other highlights included a 117% year-over-year spike in data center revenues and gross margins steady at 75%, though those could fall slightly in the second half due to high memory costs. Nvidia also noted that its new chip architecture, Vera Rubin, is now in full production. "The revenue beat is healthy and gross margin of 75% is firm," Peterson said. Shares initially backtracked. Then the call began, easing worries. Notably, Nvidia expects revenue to grow about 70% in fiscal 2028, extending the outlook for solid AI demand, and the company hinted that figure was partially constrained by supply issues. Analysts had expected 44%. This helped turn early overnight losses of around 3% into gains of 6%. If the gains hold, it will change the pattern of Nvidia losing ground the day after earnings.
- Warsh takes mic: Fed Chairman Warsh speaks at 10 a.m. ET tomorrow, so trading might be sluggish later today and early Friday as investors await his wisdom. Past Fed chairs have used the Jackson Hole Symposium to deliver a wide economic and policy view. Warsh, however, doesn't want the Fed to lead the market with its predictions or by hinting how it might act. "The market hopes to get some clarity from Warsh about whether the Fed still sees 2% inflation as its goal and, if so, how it plans to use monetary policy to help get there," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab. "It will be very interesting to see what he focuses on in tomorrow's speech, given his distaste for guidance or really for sharing much at all about his own thinking or the Fed’s plans." Two possible topics investors might have their ears perked for include updates on various task forces Warsh initiated, and comments on Treasury's recent decision to raise the size of buybacks—designed to lower yields.
- Rotation keeps market breadth healthy: Though markets haven't been able to retest recent all-time highs lately, breadth remains in good shape with about three quarters of S&P stocks trading above their 200-day moving averages. This comes despite a massive implosion the last few months concentrated in Korean memory stocks, but also in U.S. chip names. The fact that most stocks remain above their long-term averages points to continued rotation under the hood, and speaks to generally solid market health. "Correction or bear market risk tends to rise most when the indexes move higher as breadth deteriorates," said Kevin Gordon, head of macro research and strategy at SCFR. "Over the past three months, we have almost seen the opposite, with the S&P 500 up marginally yet breadth improving—perhaps emphasized most by the fact that the equal-weighted S&P 500 is up by 6% while the Magnificent Seven cohort is down by 3%" as of midday Wednesday.
Crypto currents
Bitcoin rally faces hurdles: Bitcoin's 24% move last week—its biggest weekly gain in more than three years—was fueled partly by an extraordinary burst of short-covering. On August 19, the day the U.S. Treasury Department said it would expand its bond purchases to cap yields, short-covering hit the highest single-day total since at least 2019, according to data provider Glassnode. But investors also jumped into long positions. Last week saw the strongest single-week net inflows into spot bitcoin exchange-traded products (ETP) since October 2025, when bitcoin hit its current all-time high. But resistance sits just overhead. The true market mean, the average cost basis of all coins acquired on the secondary market, is about $81,000, about where bitcoin peaked earlier this week. Meanwhile, the average cost basis for ETP buyers is around $83,000, meaning the zone around that price is a break-even level for many investors who've been sitting on losing positions for months, and they may be tempted to get out. Bitcoin would likely have to get past these hurdles for the rally to keep going.
On the move
- Salesforce (CRM) leaped 10% as earnings, revenue and guidance all topped analysts' expectations. The company also benefited from its investment in Anthropic. Shares, which slumped earlier this year, rose into the report but remain down sharply year to date.
- CrowdStrike (CRWD) soared 9% after earnings and revenue for the cybersecurity firm surpassed analysts' estimates. Guidance also beat expectations.
- Chip stocks generally got boosted by Nvidia's powerful quarter and guidance. Strength flowed into names like Seagate Technology (STX), Western Digital (WDC), CoreWeave (CRWV), Micron (MU), and Arm Holdings (ARM), all up 3.5% to 5% in early action.
- Hewlett Packard (HPQ) tumbled 13.7% before the open despite a solid quarterly showing and guidance from the computer maker. Total hardware unit sales fell 7%, however, possibly a disappointment.
- Best Buy (BBY) fell 8% even though the electronics retailer surpassed analysts' expectations and lifted guidance. Sales at stores opened a year or more rose 4.1%.
- Dollar General (DG) climbed 6% after the discount retailer lifted its full-year earnings guidance and announced new share repurchases.
- Okta (OKTA) jumped 18% after earnings late Wednesday topped expectations for the cloud software firm.
- Abercrombie & Fitch (ANF) surged almost 36% Wednesday after beating analysts' earnings expectations and seeing several analysts up their price targets. Guidance looked better than expected, and the quarter was helped by tariff refunds.
- Treasury yields ticked up Wednesday after several days of easing, hurt partly by weaker-than-expected demand for a 5-year note auction. A 7-year note auction occurs later today.
More insights from Schwab
Labor force decline raises concerns: Labor force participation fell to 61.4% in July, a 50-year low, excluding the COVID era. Investors may want to watch this metric because a smaller worker pool can limit economic growth, keep wage and inflation pressures elevated, and complicate the Fed's interest rate decisions.
Income from dividends: For investors looking to balance income needs with long-term growth, dividend-paying stocks offer a practical way to potentially keep money working in the market and stay invested over time.
Chart of the day
Data source: CME Group. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Natural gas futures (/NG—candlesticks) are trailing far behind WTI crude oil futures (/CL—purple line) so far this year even though the war in Iran also affected supplies and transport of natural gas. A price at current levels below $3 per one million British thermal units (MMBtu) is historically low, down 32% from five years ago. Current forecasts for possible warm winters in the Northern Hemisphere due to the strong Pacific El Nińo may be keeping gas prices down. But sudden cold spells—like the one last winter that sent natural gas prices above $7—can have a sudden impact on trading.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
August 28: Final August University of Michigan Consumer Sentiment Index.
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 factor 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).