Markets Digest Fed Pivot, Eye Nvidia Earnings & Intel Stake

August 26, 2025

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Markets Digest Fed Pivot, Eye Nvidia Earnings & Intel Stake

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Wall Street opened mixed on Monday as traders weighed Friday’s post-Jackson Hole rally against a looming Nvidia earnings report and the US government’s surprise 10 % stake in Intel. Below are the key take-aways for Australian investors.

Fed Chair Powell’s dovish tilt: Markets interpreted Powell’s Jackson Hole speech as opening the door to a September rate cut, with futures now pricing multiple cuts into 2026.
Summers’ caution: Former US Treasury Secretary Lawrence Summers warned the Fed risks undermining its inflation-fighting credibility if it eases too aggressively amid tariff-driven price pressures.
Stagflation risk: Summers sees “stagflationary impulses” from tariffs and politicisation of the Fed as the bigger medium-term threat than a mild labour-market slowdown.
Intel government stake: The US will take a 10 % equity position in Intel, sending the shares up 8 % pre-market; Summers labelled the move “deals-based capitalism” and questioned its long-term efficacy.
Nvidia earnings Wednesday: Consensus expects strong Q2 numbers and upbeat guidance; any disappointment could trigger a broad tech unwind given crowded positioning.
Market breadth: S&P 500 equal-weight index finally cleared its November 2024 high, a positive sign for participation beyond mega-caps.
Yield-curve signal: The 2- to 5-year segment of the US curve fell 11 bps post-Powell, implying sooner rather than later easing, yet short-end bills barely budged—suggesting some caution on timing.
Walmart dip-buying: Evercore ISI sees $110 fair value (≈13 % upside) after a mixed quarter, citing share gains and omni-channel investment.

Trading dashboard:

Bottom line: While the Fed has telegraphed a September cut, the balance of risks still skews toward sticky inflation. Position sizing around Wednesday’s Nvidia print and ongoing tariff headlines will dictate near-term volatility. Australian investors should watch the AUD/USD reaction to any USD weakness and consider gold as a hedge against stagflationary outcomes.

“Those who know that they are profound strive for clarity. Those who would like to seem profound to the crowd strive for obscurity. For the crowd believes that if it cannot see to the bottom of something it must be deep.” – Nietzsche

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