Markets Slip Early on Inflation Data Before Nvidia

Published as of: August 26, 2026, 9:17 a.m. ET

(Wednesday market open) The Federal Reserve's favored inflation data generally matched expectations on a monthly basis, but Wall Street slipped on sticky annual readings ahead of Nvidia's (NVDA) results later today. Headline July monthly Personal Consumption Expenditures (PCE) price growth of 0.2% topped consensus, but core PCE, excluding food and energy, was in line at 0.2%. Consensus was 0.1% and 0.2%, respectively, month over month.

Treasury yields initially declined on the monthly PCE readings but ticked up as investors noted higher-than-expected annual growth of 3.7% for headline PCE and 3.3% for core. Even so, it's monthly changes that may matter more to the Fed. "This shouldn't change the Fed's thinking—monthly core inflation readings of 0.2% or less should continue to allow it to remain on hold," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR).

Major indexes rose Tuesday, with the Nasdaq gaining 0.7% as chipmakers rebounded from Monday's losses before Nvidia's (NVDA) highly anticipated earnings report this afternoon. WTI Crude Oil futures (/CL) fell nearly 5% as concerns over renewed fighting in Iran receded. Oil continued retreating today as Iran and Oman appeared close to a deal to reopen the strait. The 10-year Treasury note yield hit a three-week low Tuesday.

1. PCE inflation data first take: Today's PCE print compared with June's -0.1% for headline and 0.1% for core. Annual headline PCE growth of 3.7% and core PCE of 3.3% were well above the Fed's 2% goal. In the wake of PCE, odds of a September Fed rate hike fell to 38% from almost 40% a day earlier, according to the CME FedWatch Tool. Odds of a hike by year-end stayed at 73%. Though yields ticked up by a just a basis point after the PCE data, recent economic releases that have simply met expectations rather than surprising to the upside have generally provided relief to the bond market. The core monthly reading fits that description. In other data, the government's second estimate for second quarter gross domestic product (GDP) was unchanged at 1.5%. Separately, personal spending in July rose 0.2%, in line with consensus, while the GDP report's personal consumption reading was upwardly revised to 3.4% from 3.2%. "Mixed news on the consumer front," Martin said. "The upward revision to personal consumption in the second quarter GDP report is good for the economy, but real personal spending was flat in July, its worst month since January." Real personal spending is inflation adjusted.
    
2. All eyes on AI bellwether Nvidia's earnings: How high is the bar for chipmaker Nvidia when it reports earnings this afternoon? It's shaping up as something of a referendum on the entire AI investment cycle, after investors recently shifted from celebrating any and all AI capital spending to questioning the returns on those investments. If Nvidia smashes expectations and offers an unmitigated bullish outlook, it could reignite the AI-led rally, though so-called whisper numbers may be higher than analysts' average estimate. But if it disappoints in any way, it could reignite the cyclical rotation that's taken place more recently. Nvidia is expected to report quarterly earnings of $2.09 a share, double the prior year's quarterly results. Revenue is expected at $92 billion, nearly double the prior-year's quarter and the fastest growth in seven quarters. Margins and pricing will also be in focus. But guidance for the next quarter is likely to matter most to investors, eager to hear the company's take on hyperscaler capital spending and returns on those investments. They'll also want to learn about any fresh share buybacks.
    
3. Earnings, great expectations, and whisper numbers: As earnings season winds down, S&P 500 companies are on pace to report quarterly earnings growth of roughly 50%, the strongest since 2021, with about 85% of companies beating analyst expectations. So why are we seeing so much churn in the market? Increasingly, companies need to beat the whisper numbers, the usually higher expectations of the buy-side analysts who put money in the market. While this gap between sell-side consensus and buy-side expectations has existed for a long time, for certain stocks it may be stretched a little too far in the current environment, said my colleague Liz Ann Sonders, chief investment strategist at SCFR. Another possible explanation is that the market—always forward-looking—has started to question whether the extraordinary earnings growth at AI-related companies may be approaching an inflection point. "It's that rate of change, that change in direction that matters," Sonders said.

• Meta (META) jumped 4% on a CNBC report that the company reached a settlement with state attorney generals in a teen addiction case.
   
• Intuit (INTU) tumbled more than 10% early after surpassing analysts' earnings and revenue expectations but coming up short in terms of guidance. It increased its dividend but received downgrades from Bank of America and JPMorgan Chase.
   
• J.M. Smucker (SJM) rose 4% after topping consensus on earnings and raising guidance to top analysts' estimates.
   
• Spyre Therapeutics (SYRE) fell 11.4% after sharing results from a rheumatoid arthritis sub-study that disappointed.
   
• Zoom Communications (ZM) plunged 6% despite results that surpassed Wall Street's estimates but gave no updates on its stake in Anthropic, Barron's reported. Guidance was below analysts' expectations.
   
• Nike (NKE) fell 3.1% Tuesday after Dick's Sporting Goods (DKS) warned of a challenging environment for athletic footwear and apparel.
   
• Nvidia rose 2.2% Tuesday to break a seven-day losing streak, its longest since 2022. The options market prices in high odds of a sharp move one way or the other after earnings, and Nvidia shares have lost ground following recent earnings reports even when beating estimates.
   
• Advanced Micro Devices (AMD) rose almost 5% Tuesday. It's the stock typically most correlated with Nvidia's performance after Nvidia earnings, so might be worth watching when Nvidia reports, The Wall Street Journal said. Other chip stocks also could move on the Nvidia results.
   
• Crypto-related stocks gained again Tuesday as bitcoin briefly topped $80,000 for the first time since May. Strategy (MSTR), Coinbase (COIN), and Circle (CRCL) all rose at least 3%.

It's been an up-and-down year for the U.S. Dollar Index ($DXY—candlesticks). It rallied after the start of the Iran war, fueled by the prospect of sustained higher oil prices and inflation. But it fell after the Federal Reserve meeting in late July, and dropped below the 200-day moving average (green line) after the Treasury Department said last week that it would expand bond buybacks to contain yields.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

August 27: Expected earnings from Royal Bank of Canada (RY), Toronto-Dominion Bank (TD), Dollar General (DG), Dollar Tree (DLTR), Burlington Stores (BURL), Best Buy (BBY), Marvell Technology (MRVL), Autodesk (ADSK), Workday (WDAY), Affirm Holdings (AFRM), and Ulta Beauty (ULTA).
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).