The Market Holds Its Breath
Sticky inflation in the morning, the AI bellwether after the bell, and the Fed chair two days out. Wednesday was a market unwilling to commit — frozen between the three forces about to decide September.
Some sessions are about conviction. Wednesday was about the absence of it. The S&P 500 finished essentially flat at 7,675.70, a 1.58-point loss, as traders declined to place bets ahead of the two events that will define the next month: Nvidia's earnings after the close and Kevin Warsh's Jackson Hole keynote on Friday. The morning's inflation data gave them no reason to lean either way.
The Fed's preferred inflation gauge, the July PCE price index, came in sticky and above target. Core PCE rose 0.2% on the month and held at 3.3% year over year — unchanged from June and still well north of the Fed's 2% goal. The headline rate sat at 3.7%. In the same batch of data, second-quarter GDP was confirmed at a 1.5% annual pace, down from 2.1% in the first quarter. Cooling growth, stalled inflation: the least helpful combination for a central bank, and yields ticked higher in response.
The bellwether goes quiet before it roars
Nvidia itself slipped more than 1% into its report — its eighth losing day in nine — and has added less than 13% in 2026, a striking deceleration from its recent years of monster gains. That underperformance set an anxious tone. The relief came after the bell: Nvidia delivered a strong third-quarter outlook, and CEO Jensen Huang, defending the company's aggressive investments, told analysts his “only regret” was not investing more and sooner. Salesforce jumped 13% after hours on its own guidance, and Abercrombie & Fitch had already soared 35% on a raise.
A flat tape is not a calm one. Wednesday was a coiled spring — sticky inflation on one side, the AI bellwether on the other, and the Fed chair waiting at the end of the week.Momentum Check
Momentum read
Momentum is on hold, by choice. With core inflation refusing to fall and traders still mostly betting on a rate hike by year-end, the burden of proof shifted to Nvidia to justify the AI trade and to Warsh to define the policy path. Nvidia did its part after the close. Friday, Warsh gets the last word.
A deliberately frozen session: sticky 3.3% core PCE, slowing 1.5% GDP, and a market refusing to commit before Nvidia and Warsh. Nvidia's after-hours outlook was strong — a real prop for the AI trade heading into Thursday. But the policy question now rules everything, and it gets answered in Wyoming.