August, one of the worst trading months for stocks, could end on a high note next week, now that investors have greater confidence a September rate cut is on the table. In fact, if Nvidia ‘s earnings results and the Federal Reserve ‘s preferred inflation gauge next week confirm the latest rally, that could be supportive of a broad-based advance going forward. Just about everything rallied on Friday, after Fed Chair Jerome Powell delivered what was likely his final speech at Jackson Hole, Wyo., one that gave investors exactly what they wanted after suggesting the central bank was ready to lower interest rates at its next meeting. “Powell delivered a final Jackson Hole speech to be remembered,” said Sam Stovall, chief investment strategist at CFRA Research. “He essentially gave investors what they had been hoping for, which was a dovish outlook on future Fed policy.” “It has removed an important restraint that was tied to investor optimism,” Stovall continued. “In that the Fed now seems fairly clear that they will, or are leaning toward, cutting rates in mid-September.” .DJI 5D mountain Dow Jones Industrial Average, over five days On Friday, the Dow Jones Industrial Average hit a fresh record during the session, after rallying more than 900 points at its high, or 2%. Small caps rallied, with the Russell 2000 jumping more than 3%. The S & P 500 Equal Weight reached an all-time high, surpassing its prior record from November of last year. Semiconductors surged. Regional banks jumped. And, of course, the mega-caps roared back to life. On Friday, the Magnificent Seven stocks were pacing for their best day since May, adding a collective $370 billion in market cap to the day’s moves, according to CNBC data and analytics producer Nick Wells. To put that in perspective, that’s roughly the total market cap of Procter & Gamble. To be sure, investors still have to get through a raft of economic data next month before the Fed’s Sept. 16-17 meeting. But the elation Friday could carry the market through next week before Labor Day weekend, potentially in all parts of the market. Nvidia’s earnings could confirm whether tech is a buying opportunity. July’s personal consumption expenditure price index reading could confirm whether the rotation up and down the cap spectrum is warranted. Nvidia signal Nvidia’s earnings next week could confirm whether the tech rally is back on, now that the Magnificent Seven cohort is just starting to recover from its recent weakness. The artificial intelligence darling is expected to beat expectations as it’s done for just about the entirety of the AI rally, but the results come at a troubled time for the chipmaker, as the American company’s exposure to China has put it in the crosshairs of the Trump administration and Beijing. Nvidia CEO Jensen Huang most recently said the company is in talks with the U.S. to sell a more advanced version of the H20 chip that it’s allowed to sell to China. The company is also expected to give 15% of its China chip sales to the U.S. government in exchange for export licenses. Even with those hurdles, however, many analysts remain bullish on the stock, saying the rapid ramp up of AI capital expenditures is unlikely to dwindle anytime soon. That could serve as a tailwind for the tech trade, which has faltered on Wall Street in recent weeks. “We anticipate a meaningful uptick in estimates on the Street for Nvidia, when these earnings are done,” said Harsh Kumar, senior research analyst covering semiconductors at Piper Sandler. The analyst has a buy rating on Nvidia. The Fed’s favorite inflation gauge The July personal consumption expenditure price index that comes out Friday will likely hold no surprises for investors or the Fed, who expect an uptick in inflation from tariffs will finally be disclosed. Economists polled by FactSet expect core PCE, which strips out volatile food and energy prices, will rise 2.9% on a year-over-year basis. That compares to a 2.8% increase in June. And yet, with the Fed having already signaled that a September rate cut may be on the table, even with the expectation of higher inflation, markets are unlikely to be too ruffled by that disclosure. “Investors are well aware of short-term hurdles,” CFRA’s Stovall said. “So, next week, I think, should end up being a positive week.” August, in spite of its historical track record of weakness, has borne out especially well for the stock market. As of Friday’s close, the 30-stock Dow is on pace to be the leader this month, up more than 3%. The S & P 500 has advanced 2%. The tech-heavy Nasdaq Composite is the laggard in August, gaining 1.8%. Week ahead calendar All times ET. Monday, Aug. 25 10:00 a.m. New Home Sales (July) 10:30 a.m. Dallas Fed Index (August) Tuesday, Aug. 26 8:30 a.m. Durable Orders preliminary (July) 9:00 a.m. FHFA Home Price Index (June) 9:00 a.m. S & P/Case-Shiller comp.20 HPI (June) 10:00 a.m. Consumer Confidence (August) 10:00 a.m. Richmond Fed Index (August) Wednesday, Aug. 27 Earnings: Nvidia , HP, NetApp , CrowdStrike , Agilent Technologies , J.M. Smucker Thursday, Aug. 28 8:30 a.m. Continuing Jobless Claims (08/16) 8:30 a.m. GDP second preliminary (Q2) 8:30 a.m. Initial Claims (08/23) 10:00 a.m. Pending Home Sales (July) 11:00 a.m. Kansas City Fed Manufacturing Index (August) Earnings: Ulta Beauty , Dell Technologies , Autodesk , Hormel Foods , Dollar General , Best Buy Friday, Aug. 29 8:30 a.m. Personal Consumption Expenditure (July) 8:30 a.m. Wholesale Inventories preliminary (July) 9:45 a.m. Chicago PMI (August) 10:00 a.m. Michigan Sentiment final (August)
