.jpg "Nvidia Earnings Next Test for Market Rally Photo")
Federal Reserve (Fed) Chair Powell delivered exactly what investors were looking for Friday during his Jackson Hole speech, confirming “the time has come” for interest rate cuts to begin1. Chair Powell’s statement that Fed policymakers “do not seek or welcome further cooling in labor market conditions” is a clear sign that the jobs market is taking on more weight in the Fed’s dual mandate (i.e. price stability and full employment)2. Financial markets welcomed the prospect of easier monetary policy ahead, with stocks and bonds rallying strongly to close out the week.
This week will provide another important test for the recent rally with Nvidia - the biggest winner from investor enthusiasm for artificial intelligence (AI) - set to report earnings Wednesday. Once again, the bar is set high for Nvidia to soundly beat lofty earnings expectations. As investors begin to question when large capitalization technology winners will monetize their massive AI spending, another positive Nvidia earnings report is likely necessary for markets to sustain upside momentum.
Sources:
1,2Board of Governors of the Federal Reserve System – Speech by Chair Powell on economic outlook (08/23/2024)
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