Stocks Rally as Nvidia Earnings Boost AI Optimism

The S&P 500 Index ($SPX) (SPY) is up by +0.39% today, the Dow Jones Industrial Average ($DOWI) (DIA) is up by +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.84%.  E-mini S&P futures (ESU26) are up +0.30%, and September E-mini Nasdaq futures (NQU26) are up +0.71%.

Stock indices are moving higher today, with the S&P 500 and Nasdaq 100postign 1-week highs.  Stellar earnings from Nvidia are powering technology stocks higher today. Nvidia is up more than +6%, leading chipmakers and AI-infrastructure stocks higher after issuing a revenue growth forecast for fiscal 2028 far above expectations.  Also, a $31 billion joint venture between Sandisk and Kioxia Holdings to ratchet up flash memory production added to the bullish tone in technology stocks.  In addition, cybersecurity stocks are stronger today after better-than-expected earnings from Okta and CrowdStrike Holdings, and software stocks are climbing after Salesforce forecast Q3 revenue above consensus.

Signs of strength in the US labor market are positive for economic growth and stocks after weekly initial unemployment claims unexpectedly fell -4,000 to 203,000, showing a stronger labor market than expectations of an increase to 208,000.

Comments today from Kansas City Fed President Jeff Schmid were hawkish and bearish for stocks and bonds when he said current Fed policy is not restraining the economy at a time when inflation continues to run above its 2% target. He added that the interest rate setting "might be accommodative on the short end" and that "we've got work to do."

Oct WTI crude oil prices (CLV26) are moving higher today on a Bloomberg report that said Russia was planning to escalate the war in Ukraine, which could disrupt Russian crude output and lower global oil supplies.  Crude prices fell to a 2-week low on Wednesday after Iran’s military said it reached a revenue-sharing agreement with Oman on the reopening of the Strait of Hormuz.  Crude prices have fallen more than -8% this week on signs of easing tensions in the Middle East and a partial resumption of crude supplies through the Strait of Hormuz. On Tuesday, The New York Times reported the US State Department is preparing to send US diplomats back to embassies in the Middle East that were evacuated before and during the war with Iran, suggesting that the Trump administration does not anticipate a return to all-out hostilities with Iran.

The outlook for strong Q2 earnings is a bullish factor for stocks. The S&P 500 is tracking for earnings growth of almost 32% in Q2, well above projections of +23%, and nearly four times the average earnings growth rate outside of the Covid period since Q4 of 2013, according to Bloomberg Intelligence.  AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2.  So far, earnings results have been positive, with 86% of the 478 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. 

The markets are discounting a 35% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is down -0.23%.  China's Shanghai Composite climbed to a 1-week high and closed up +1.13%.  Japan's Nikkei-225 Stock Average fell from a 1-week high and closed down -0.20%.

Interest Rates

September 10-year T-notes (ZNU6) are unchanged today.  The 10-year T-note yield is unchanged at 4.660%.  T-notes are little changed today amid strength in stocks, which is curbing safe-haven demand for government debt securities.  Supply pressures are negative for T-notes as the Treasury will auction $44 billion of 7-year T-notes later today.  In addition, an unexpected decline in weekly US jobless claims is bearish for T-notes.  Finally, hawkish comments today from Kansas City Fed President Jeff Schmid undercut T-notes when he said current Fed policy isn’t in restrictive territory.

European government bond yields are mixed today.  The 10-year German bund yield is up +1.7 bp to 3.251%. The 10-year UK gilt yield is down -0.1 bp to 5.030%.

Eurozone July M3 money supply rose +3.4% y/y, weaker than expectations of +3.5% y/y. 

The German Sep GfK consumer confidence index rose +2.8 to a 6-month high of -26.6, stronger than expectations of -29.5.

Markets are discounting a 97% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.

US Stock Movers

Chipmakers and AI-infrastructure stocks are rallying today after Nvidia reported Q2 revenue of $96.22 billion, well above the consensus of $92.38 billion, and projected fiscal 2028 revenue to grow about 70%. The iShares Semiconductor ETF (SOXX) is up %.  Nvidia (NVDA) is up more than +7% and ARM Holdings (ARM) is up more than +5%.  Also, Intel (INTC) and Broadcom (AVGO) are up more than +2%, and Lam Research (LRCX), Sandisk (SNDK), and Marvel Technology (MRVL) are up more than +1%.

Software stocks are moving higher today, led by a +18% jump in Salesforce (CRM) to lead gainers in the Dow Jones Industrials after it forecasted Q3 revenue of $11.42 billion to $11.50 billion, with the midpoint above the consensus of $11.42 billion. Also, Datadog (DDOG) and ServiceNow (NOW) are up more than +7%, and Atlassian Corp (TEAM) is up more than +5%.  In addition, Adobe Systems (ADBE), Autodesk (ADSK), Palantir Technologies (PLTR), and Workday (WDAY) are up more than +3%, and Oracle (ORCL) is up more than +1%.

Cybersecurity stocks are stronger today, following stellar earnings results from Okta and Crowdstrike Holdings.  Okta (OKTA) is up more than +23% after boosting its 2027 revenue forecast to $3.22 billion to $3.23 billion from a previous forecast of $3.19 billion to $3.21 billion, above the consensus of $3.20 billion.  Crowdstrike Holdings (CRWD) is up more than +14% to lead gainers in the Nasdaq 100 after raising its 2027 adjusted operating income forecast to $1.50 billion-$1.51 billion from a previous forecast of $1.45 billion-$1.48 billion, better than the consensus of $1.47 billion.  Also, Palo Alto Networks (PANW) and Zscaler (ZS) are up more than +9%, and SentinelOne (S) is up more than +7%. In addition, Cloudflare (NET) and Fortinet (FTNT) are up more than +4%. 

Veeva Systems (VEEV) is up more than +17% to lead gainers in the S&P 500 after reporting Q2 adjusted EPS of $2.35, above the consensus of $2.22, and raising its 2027 adjusted EPS forecast to $9.21 from a previous forecast of $9.05, stronger than the consensus of $9.06.

Nutanix (NTNX) is up more than +6% after reporting Q4 revenue of $757.1 million, better than the consensus of $738.1 million. 

Dollar General (DG) is up more than +4% after reporting Q2 net sales of $11.29 billion, stronger than the consensus of $11.19 billion, and raising its 2027 comparable sales forecast to up +2.5% to +2.9% from a previous forecast of +2.2% to +2.7%, higher than the consensus of +2.42%. 

Wendy’s (WEN) is down more than -12% after Reuters reported that Trian Fund Management has no plans to make a bid at this time to take the company private.

Hormel Foods (HRL) is down more than -7% to lead losers in the S&P 500 after reporting Q3 net sales of $2.96 billion, below the consensus of $3.03 billion, and cutting its full-year net sales forecast to $12.1 billion to $12.2 billion from a previous forecast of $12.2 billion to $12.5 billion, weaker than the consensus of $12.24 billion.

HP Inc. (HPQ) is down more than -5% after forecasting Q4 adjusted EPS of 69 cents to 79 cents, the midpoint above the consensus of 67 cents, but without an 8-cent-per-share boost from tariff refunds, the outlook would be below consensus.   

Dollar Tree (DLTR) is down more than -2% after forecasting Q3 net sales of $5.0 billion to $5.1 billion, the midpoint below the consensus of $5.06 billion. 

Earnings Reports (8/27/2026)

Affirm Holdings Inc (AFRM), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Dollar General Corp (DG), Dollar Tree Inc (DLTR), Elastic NV (ESTC), Forgent Power Solutions Inc (FPS), Gap Inc/The (GAP), Hormel Foods Corp (HRL), IREN Ltd (IREN), Marvell Technology Inc (MRVL), Rubrik Inc (RBRK), SentinelOne Inc (S), Ulta Beauty Inc (ULTA), Workday Inc (WDAY).