Stocks close higher as Nvidia beats, inflation cools and Warsh avoids a September signal
The S&P 500 gained roughly 1.1% on the week’s final trading day after data cleared the three catalysts investors had been positioning around since Monday.
U.S. equities closed higher on Friday, capping a week in which the market absorbed three separate catalysts it had spent days positioning around. The S&P 500 finished up roughly 1.1% for the session, the Nasdaq Composite gained about 1.4%, and the Dow Jones Industrial Average added 0.6%, with the gains concentrated in the same semiconductor and AI-adjacent names that had led Monday’s losses.
Nvidia reported quarterly results Wednesday after the close, beating consensus on both revenue and its data-center segment. The company’s shares rose about 4% the following session, and the print was read across the market less as evidence of accelerating growth than as reassurance that AI infrastructure spending has not slowed the way some investors had worried heading into the report.
July personal consumption expenditures data, released the same day, showed headline inflation cooling to 3.2% from June’s 3.4%. The deceleration was smaller than some economists had forecast, but it was real, and it took some of the force out of the case for further tightening that three regional Fed presidents had made in dissent at the July meeting.
Fed Chair Kevin Warsh delivered his first Jackson Hole address Friday morning, running close to 25 minutes. Consistent with his approach since taking office in May, he declined to pre-commit to a September move. But he weighted the speech more toward labor-market cooling than toward the inflation side of the Fed’s mandate — a shift markets read as modestly dovish relative to the hawkish tilt the July minutes had revealed.
The reaction was visible in rates. The 10-year Treasury yield fell roughly eight basis points during and after the address, and fed funds futures moved to price a higher probability of a September rate cut than they had priced as of Thursday’s close.
None of the three catalysts resolved cleanly in one direction, and none resolves the underlying disagreement inside the Committee. The three July dissents wanted tighter policy on the grounds that inflation was proving durable; Friday’s data gave the other side of that argument a slightly stronger hand heading into the September meeting, without settling it. The August jobs report and another CPI print are still due before the Committee votes.