Nvidia earnings, Jackson Hole to test pillars of stock rally

Nvidia's earnings report and the Federal Reserve's Jackson Hole symposium will be crucial in testing the assumptions behind this year's stock market rally. Rising global bond yields, reaching their highest level since 2007, have pressured stocks and raised concerns about borrowing costs for companies heavily invested in AI infrastructure. Treasuries tried to calm markets with increased buybacks, but yields rebounded, sharpening focus on the Jackson Hole event.

David Wagner, head of equities at Aptus Capital Advisors, emphasized the uncertainty surrounding the symposium, noting a lack of clarity regarding Fed Chair Kevin Warsh's policy communication. Nvidia's second-quarter results on August 26 will provide insights into the AI ecosystem. The company has secured financing for AI infrastructure with six financial institutions, totaling over $500 billion.

Investors will be looking to Jackson Hole for policy clues and to gauge Warsh's approach to monetary policy without traditional forward guidance. Market volatility is expected as traders reassess the outlook for interest rates.