Nvidia's earnings beat collides with a hawkish Fed reset

Last week's action was defined by two collisions: Nvidia's fiscal second-quarter results and the Federal Reserve's tone at Jackson Hole. Nvidia posted revenue up 106% year over year to $96.2 billion, with data-center sales of $89 billion, and the stock jumped 8.7% the day after reporting, its biggest one-day gain in more than a year. But Fed Chair Kevin Warsh used his first Jackson Hole speech to argue inflation has not meaningfully slowed and that the central bank still has work to do, and short-term yields jumped as rate-hike odds rose. Nvidia gave back most of its post-earnings pop by Friday, and the same hawkish repricing shaped the week's sector map: Communication Services and Information Technology led, while Health Care, Industrials, Real Estate and Energy lagged. Gold fell 3.3% and silver slipped 1.6% for the week even though both remain up double digits for the month, a sign the disinflation and debasement trades are being tested by higher real rates.

This week extends that test directly. Friday's nonfarm payrolls report, alongside Thursday's ADP employment reading and Tuesday's ISM manufacturing and JOLTS data, will show whether the labor market backs up Warsh's hawkish read or gives the Fed room to ease off it. Layered on top, Broadcom's Wednesday earnings are the next checkpoint for the AI capital-spending story that carried Nvidia and the broader tech-led rotation last week, a read-through that matters given how much of last week's sector leadership, and our catalyst radar's mega-cap tech signal cluster, depends on that spending continuing uninterrupted.

Nvidia's fiscal second quarter, revenue up 106% year over year to $96.2 billion, with data-center sales of $89 billion and management guiding toward roughly 70% growth through fiscal 2028, reset the bar for the entire AI supply chain, even though the stock gave back most of its post-earnings pop once yields jumped. Our catalyst radar picked up the ripple effect immediately: Super Micro Computer (SMCI) and Navitas Semiconductor (NVTS) both saw unusual options volume tied directly to the AI data-center theme, though Navitas also carries a flagged debt-covenant breach worth watching alongside the enthusiasm. The next checkpoint is Wednesday, when Broadcom (AVGO) reports, already showing elevated options activity and congressional trade disclosures on our radar, and the market's cleanest proxy for whether hyperscaler capex commitments hold at Nvidia's pace. Credo Technology (CRDO), a data-center interconnect supplier reporting Tuesday, adds another read on demand further down the supply chain. Communication Services and Information Technology led every other sector last week; whether that leadership holds depends on Broadcom's guidance not disappointing.

Fed Chair Kevin Warsh's first Jackson Hole speech leaned hawkish, he argued inflation is not meaningfully slowing and that the central bank still has work to do, and the market's rate-sensitive corners repriced accordingly. Health Care (-1.98%), Industrials (-1.73%), Energy (-1.51%) and Real Estate (-1.33%) were last week's weakest sectors, and gold fell 3.3% while silver slipped 1.6%, even though both remain up double digits for the month as the broader debasement trade stays intact on net. Within health care, BioNTech (BNTX) is an idiosyncratic name to watch heading into a cluster of phase 3 readouts our radar flagged, spanning programs in triple-negative breast cancer, squamous non-small-cell lung cancer and HPV-positive head and neck cancer, any one of which could move the stock independent of the sector's rate-driven weakness. The next signal for whether this rotation extends or fades arrives this week: Friday's nonfarm payrolls report follows Thursday's ADP reading, and a labor market that runs hot would reinforce Warsh's tone and keep pressure on yield-sensitive and defensive equities alike.

One of the more unusual signals on our catalyst radar this week is how tightly it clusters: Microsoft (MSFT), Meta Platforms (META), Amazon (AMZN) and Apple (AAPL) each triggered three separate flags at once, a disclosed-purchase watchlist hit, unusual options volume, and a congressional stock trade disclosure, the same week Communication Services and Information Technology topped the sector table. Alphabet (GOOGL), Broadcom (AVGO) and Advanced Micro Devices (AMD) showed a similar, if narrower, overlap between options flow and congressional trading activity. None of this confirms a catalyst on its own, but the concentration of three independent signal types on the same handful of names is worth tracking as position-flow evidence that investor attention, retail, institutional and political, is converging on the same mega-cap basket that already carried last week's gains. Whether that crowding persists or unwinds may hinge on how the group's upcoming reports, including Broadcom on Wednesday, land against a Fed that just turned more hawkish.

Macro focus builds through the week: Tuesday brings the ISM manufacturing PMI and JOLTS job openings, Thursday brings the ADP employment report, and Friday's nonfarm payrolls and unemployment rate close the week as the key test of the Fed's hawkish Jackson Hole tone. Earnings are heaviest midweek. Tuesday features Medtronic (MDT), Palo Alto Networks (PANW), Dell Technologies (DELL), MongoDB (MDB) and Credo Technology (CRDO). Wednesday is the marquee day, led by Broadcom (AVGO), alongside Snowflake (SNOW), Hewlett Packard Enterprise (HPE) and Copart (CPRT). Thursday closes the week with Ciena (CIEN), Zscaler (ZS), Ambarella (AMBA) and Asana (ASAN). Broadcom's report is the highest-signal event on the calendar given last week's AI-capex read-through from Nvidia.