Shesa's Weekend Stock Market Updates - 8|30|26

Welcome to my weekend updates

Last week began on a mixed-to-soft note, with tech and semiconductor stocks under pressure. However, momentum improved midweek following fantastic earnings results and upbeat forward guidance from Nvidia, Salesforce, and CrowdStrike. Nvidia delivered strong revenue guidance, driven by continued strength in AI and data centers, while Salesforce and CrowdStrike also reported impressive results. The strong earnings helped lift the Nasdaq and broader technology sector on Thursday.

However, on Friday, we saw a modest pullback as Fed Chair Kevin Warsh’s comments reiterated the Fed’s focus on fighting elevated inflation. His Jackson Hole speech was interpreted as hawkish, raising expectations that the Fed could consider further rate hikes in the near future.

Let’s take a look at how the major stock indices performed last week.

• S&P 500: +0.5%, Closed at 7,711.76 | Year-to-Date:  up +12.7%
• Dow Jones: +0.5%, Closed at 53,559.99 | Year-to-Date: up +11.4%
• Nasdaq: +0.8%, Closed at 26,402.42 | Year-to-Date: up +13.6%
• Russell 2000: -1.5% | Closed at 2,972.37 | Year-to-Date: up +19.8%.

Earnings last week

Nvidia (NVDA)

Revenue: $96.2B vs. $92.1B, up 106% YoY.

EPS: $2.22 vs. $2.1, up 120%.

Data Center revenue: $89B

Guidance: Revenue: $108.0B vs. $104B expected.

Gross Margin: 74% vs. 75%.

My view: Despite fantastic earnings, NVDA stock has gone down after earnings for the last four consecutive quarters. The company expects to grow revenue 70% in 2028, so it’s difficult to understand investors’ expectations. Shares were up 9% new day of the earnings bucking the past trend and closed positive. 

• Salesforce (CRM) and CrowdStrike (CRWD) also reported strong results, with both stocks rising more than 20%. In my view, Salesforce was primarily up on the news of a deal that it signed with Anthropic. 

• On Friday, Fed Chair Kevin Warsh spoke at the Jackson Hole Economic Symposium. Markets interpreted his remarks as more hawkish on inflation. This pushed Treasury yields higher and increased the market-implied odds of a September rate hike from 35% to around 55%. Stocks finished modestly lower on the day.

Earnings this week

TUE, 9/1: DELL

WED, 9/2: Broadcom (AVGO)

I will be watching both the earnings since it would provide further direction to AI stocks. I am more positive on DELL.

Economic Report last week

• PCE: Fed’s preferred PCE inflation showed that prices rose 3.3% annually in July, 0.1% above estimates. 
• The headline data was a bit hotter, core PCE was in line.
• Home sales were soft, mixed PMI readings, and a slight dip in consumer confidence.

Economic Report this week

• WED, 9/2: ADP Private Payroll Report
• THI, 9/3: Service PMI
• FRI, 9/4: August jobs report (nonfarm payrolls)

Other News

Tesla (TSLA): The Cybercab is officially launching on Thursday, September 3rd. 

Stocks to watch

TSLA, NVDA, MU, DELL, AVGO, SPCX, MP, RDW, AAPL, SOXL, VIX

Going forward

There are two key earnings reports this week — DELL and AVGO. These results should give us a better sense of how the AI momentum is playing out. I think DELL should have another solid quarter, but I’m not as optimistic about AVGO. The upcoming payroll report is also extremely important. Let’s hope the U.S. economy is not losing too many jobs.

Hopefully, the Cybercab launch will provide some boost to Tesla’s stock. It may not add much to Tesla’s revenue initially, but it could provide some relief to investors and reinforce confidence in Tesla’s long-term growth story.

The most important thing is that we are at the doorstep of September, which happens to be the worst month for the stock market historically. Furthermore, it’s a midterm election year, which could add even more uncertainty and volatility to the market.

I will be conducting the next INVESTMENT MEET Q&A session on Monday, 9/7, where I will discuss these topics at length. Also, my September blog will be published next week during the long weekend.

Have a good investing!