Two events next week will test whether the AI-driven rally that has carried US stocks to repeated records this year can withstand a bond market still on edge over long-term interest rates: Nvidia's quarterly earnings on Wednesday and Federal Reserve Chair Kevin Warsh's first Jackson Hole address later the same week.
Nvidia is set to report results for its fiscal second quarter after markets close August 26. Wall Street consensus calls for revenue in the range of $93 billion to $95 billion, according to estimates compiled by Barchart. The chipmaker's stock has traded around $220 in the weeks leading up to the report, with analyst price targets clustered between $275 and $325 — implying investors are betting heavily on continued momentum in the Blackwell platform ramp and broader AI infrastructure spending.
A rally built on a narrow set of assumptions
Nvidia's results carry outsized weight for the broader market given the company's role as a bellwether for AI capital expenditure across hyperscalers and enterprise customers alike. Any sign that the pace of AI infrastructure spending is slowing — or that customers are pushing back on pricing — could ripple through a market where a handful of AI-linked names have accounted for an outsized share of this year's gains, a dynamic strategists have flagged as a key risk heading into the report.
Days later, the Jackson Hole Economic Symposium opens under the theme "Financial Innovation: Implications for Payments and Policy," running August 27–29. Warsh, who took over as Fed chair in May, has yet to lay out a detailed framework for how he intends to approach monetary policy, and his keynote will be watched closely for signals on the path of interest rates after a volatile month for long-dated Treasury yields.
The setup follows a week in which bond-market turbulence dominated trading. The 30-year Treasury yield touched its highest level in roughly 19 years before easing after the Treasury announced an expanded bond buyback program, and major indexes still finished the week lower despite a Friday rebound. Futures markets were pricing roughly a two-thirds probability that the Fed leaves its policy rate unchanged at its next meeting, according to the CME FedWatch tool, leaving Warsh's tone rather than an imminent rate move as the more immediate focus for traders.
Taken together, strategists say the two events will help determine whether the market's AI-driven advance can extend into the fall or whether higher-for-longer borrowing costs finally catch up with richly valued growth stocks.