0826 | Stocks Flat; Fed's Core Inflation 3.3% Annually; Nvidia Earnings Awaited

Mia: This is After Market on Bri Radio. I'm Mia, joined by Milo. Today we're looking at a market that held its ground while investors waited on a key inflation reading and Nvidia's earnings, plus a cyberattack hitting a major medical device maker.

Milo: We'll also dig into the Fed's preferred price gauge and what strategists are saying heading into Jackson Hole.

Mia: US stocks spent Wednesday treading water as investors worked through the Fed's preferred inflation gauge and waited on earnings from chipmaking giant Nvidia. Traders pushed bond prices lower and let equities waver, since the latest economic reports did little to change expectations that the Fed will hike interest rates this year.

Milo: Michael Purves, chief executive and founder of Tallbacken Capital Advisors, was discussing a five percent ceiling for Treasury yields and calling the current moment in US equities exceptional. Those are his assessment though, and whether that yield ceiling actually holds was not established.

Mia: And on the Nvidia front, the company's results had not come out yet as of that session, so the market's after-hours reaction to them simply stayed unknown.

Mia: The Fed's preferred inflation gauge showed core prices rising three point three percent on an annual basis in July. Economists polled by Dow Jones had expected the personal consumption expenditures price index to come in at zero point one percent for the month and three point six percent over twelve months, so the core reading came in cooler than forecast.

Milo: That same income and outlays report pointed to a relatively modest underlying pace of inflation, while real spending was soft. The spending weakness got exaggerated by temporary factors, including an earlier-than-usual Amazon Prime Day, but the fact that spending concentrated in essentials suggests the underlying pace has actually decelerated.

Mia: Stephanie Roth, chief economist at Wolfe Research, expects cooler economic data ahead, which she says would give the Fed cover to credibly hold off on hiking in September. Not everyone was on board though, since four Fed bank boards had wanted a rate hike before the July 2026 hold.

Mia: Strategists described investors approaching the Jackson Hole symposium on the back foot, with dollar and bond markets on edge ahead of the event. Treasury Secretary Scott Bessent's market intervention was described as piling pressure on Federal Reserve Chairman Warsh.

Milo: Meanwhile, eighty percent of respondents to the CNBC Fed Survey said Warsh should give more insight into his economic views. Bessent's more activist style of managing the nation's debt has Wall Street war-gaming a possibly bigger shift in the government's borrowing strategy in the coming months, with the November Treasury refunding called a wildcard.

Mia: What stays unresolved is the actual direction of the dollar and bond markets at Jackson Hole, whether Warsh responds to that survey request for more detail, and whether the borrowing strategy changes. These reports capture positioning and expectations, not completed market moves or a decided policy shift.

Mia: Stocks held steady on Wednesday as investors digested the Fed's inflation gauge and waited for Nvidia's earnings, which had not been released at the time of the report. Separately, a report says OpenAI's Jalapeño chip beat Nvidia's Blackwell systems on key inference-efficiency tests, and frames that as a fresh threat to Nvidia's margins as custom AI silicon gains ground among the big tech companies.

Milo: But the actual effect on Nvidia's margins is not quantified, the margin threat is the report's characterization rather than a measured financial outcome. The next signal is Nvidia's earnings release, and the unanswered question is whether those reported test results translate into real margin pressure.

Mia: Bloomberg's Stock Movers coverage flagged three guidance-linked reactions. Intuit, the tax-software company, was down after giving a full-year forecast for adjusted earnings and revenue that came in weaker than expected.

Milo: Abercrombie & Fitch was climbing after raising its outlook for the year, having logged higher second-quarter profit and sales on improving demand across several geographies. JM Smucker shares also rose after the company lifted its full-year sales and profit outlook, helped by growth in its Uncrustables sandwiches and coffee.

Mia: Yahoo Finance separately carried highlights from JM Smucker's first-quarter earnings call, which serves as the next reported signal on the company's quarter.

Mia: Boston Scientific, a medical device maker, is dealing with a cyberattack and its shares are falling. The attack has disrupted the company's ability to ship products, and it's not clear when services will be restored.

Mia: So to close it out, stocks tread water while Treasury yields climbed toward five percent, and core inflation cooled to three point three percent as spending softened, keeping the Fed's September decision open.

Milo: Thanks for listening.