Nvidia's Blockbuster Earnings Fuel AI Rally as Markets Await Jackson Hole Address

A powerful rally in artificial intelligence stocks, ignited by blockbuster earnings from chipmaker Nvidia (NVDA), lifted the tech sector on Thursday. The market's focus now pivots to a highly anticipated address by Federal Reserve Chair Kevin Warsh at the Jackson Hole economic symposium on Friday, which could set the tone for monetary policy in the coming months.

AI Earnings Propel Tech Sector

Nvidia anchored the rally after reporting quarterly revenue that more than doubled year-over-year and projecting 70% revenue growth for fiscal 2028, far exceeding analyst expectations. The company's shares gained 7.4% during Thursday's session and continued to climb in overnight trading. However, management noted that shortages of memory components could present a near-term supply chain constraint.

The positive sentiment rippled across the technology landscape, creating a broad-based AI rally. Key movers included:

• Salesforce (CRM): Shares rose 11.8% after the company raised its full-year revenue and profit forecasts.
• CrowdStrike (CRWD): The stock climbed 8.8% following an upgraded annual revenue forecast and a strong second-quarter earnings report.

All Eyes on Jackson Hole

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Despite the tech-driven optimism, the market is bracing for the week's main event: a major policy address from Fed Chair Kevin Warsh. The speech comes at a critical juncture, with recent data showing Personal Consumption Expenditures (PCE) inflation at 3.7%, still significantly above the central bank's 2% target.

Investors will be scrutinizing Warsh's commentary for any signals regarding the Federal Open Market Committee's (FOMC) September 16 meeting. Markets are currently pricing in a 35% probability of an interest rate hike. The speech follows a volatile week in the bond market, where the 30-year U.S. Treasury yield briefly touched a 19-year high above 5.30% before settling around 5.20%.

Geopolitical Developments Ease Oil Prices

Overnight, a significant geopolitical development provided a potential tailwind for the global economy. Iran and Oman reportedly reached an agreement concerning traffic administration in the Strait of Hormuz, a critical chokepoint for global energy supplies.

The news helped ease energy prices, with Brent crude tracking a weekly decline of over 5% to trade around $89.63 per barrel. A sustained resolution could alleviate a major source of global inflation pressure, a factor that will likely weigh on the Federal Reserve's policy calculus.