Nvidia’s second-quarter earnings report, due Wednesday after market close, is the single most consequential quarterly result of the season. The numbers themselves matter less than what comes after them: forward guidance on demand for next-generation chip products. Any meaningful deviation from the exceptionally high expectations analysts have set will almost certainly trigger substantial volatility across the S&P 500 and Nasdaq.
The timing is not incidental. Nvidia’s release follows the publication of July PCE inflation data for the United States. The Personal Consumption Expenditures index is the Federal Reserve’s preferred inflation measure, and its release carries particular weight given recent market valuation movements. Following an unsuccessful intervention by Treasury Secretary Scott Bessent, the implied probability of rate increases in the autumn has risen. Markets are currently pricing in roughly a 40 percent chance of a September increase and slightly above 60 percent for October.
Meanwhile, the Jackson Hole Economic Symposium, running Thursday through Saturday, is expected to carry even greater significance. Federal Reserve President Warsh is scheduled to speak Friday at approximately 11:00 a.m. British time. Markets are anticipating forward guidance, and its absence could intensify already substantial pressure on the US dollar. Warsh has indicated he will treat Jackson Hole as a blank slate, which leaves investors uncertain about how he intends to fill it.
Monday’s economic calendar is relatively subdued before the week’s major events. Polish retail sales for July, due at 8:30 a.m., will draw primary attention. Following recent wage data releases, concerns have mounted about potential second-round effects, where inflation persists at elevated levels driven by demand-side factors linked to consumption patterns. Analysts expect the indicator to decline from June’s 6.2 percent annual growth.
Across the Atlantic, eurozone activity data released Friday showed stronger-than-expected momentum. The services PMI held steady at 51.7, matching July’s level, while the manufacturing index advanced to 52.8, its highest point in 51 months. The composite index climbed to 52.1, the strongest reading in nine months. Germany played a significant role in that improvement, with its manufacturing sector reaching 54.1, reflecting the fastest growth pace in years, bolstered by rising demand for artificial intelligence-related technology equipment and increased defense spending. The broader eurozone showed visible employment growth and accelerating services activity fueled by tourism spending. France was the clear exception: economic activity contracted again, employment declined, and business sentiment deteriorated alongside future outlooks.
United Kingdom data also surprised to the upside, particularly in services, which reached 52.8, the highest level in six months. Milder weather conditions, technology investments, and growing domestic consumer confidence drove that expansion. The composite index advanced to 52.5 from 52.2 in July, suggesting solid third-quarter economic growth of around 0.3 percent. The manufacturing PMI retreated as expected to 51.5, the lowest in five months, primarily because companies have stopped aggressively building the inventory buffers they had previously accumulated due to Middle East conflict concerns. Operating costs experienced their steepest four-month increase from rising fuel, transport, raw material prices, and labor costs. Services employment has declined for 23 consecutive months, the longest such streak since 1996, as companies manage costs by simply not replacing departing workers.
United States PMI data proved the most surprising of all. Business activity accelerated sharply in August, with the composite index reaching its highest level in 52 months at 56. That reading suggests third-quarter economic growth approaching 3.0 percent on an annualized basis. The services sector drove the advance, with its index surging to 56.8 points, the strongest in 20 months. The manufacturing PMI retreated to 53.2, the lowest in five months, with industrial production posting its weakest result in 13 months. As in the United Kingdom, slower safety stock accumulation and delivery delays explain the slowdown. The labor market rebounded clearly, with employment posting its strongest growth since early 2025. Employers grew more willing to hire due to rising economic confidence and substantial unfilled order backlogs. Price pressures eased, with final price growth slowing to its lowest level since November, though company operating costs remain elevated from energy prices, tariffs, and supply chain bottlenecks.
Three markets warrant close attention this week. Oil prices, having reached local peaks late last week and approaching levels from a month ago, face a high bar for further advances; investors await statements from Scott Bessent regarding measures the United States plans to deploy for economic pressure on Iran. The Nasdaq 100 faces its critical test from Nvidia’s Wednesday results, which could significantly affect the broader technology index and the sustainability of the artificial intelligence-driven bull market. The EURUSD currency pair crossed 1.17 for the first time since May last week, and the unsuccessful Treasury intervention has complicated the picture further. Whether Warsh’s Friday remarks resolve that uncertainty or deepen it remains the open question heading into the weekend.