Closing Recap 

U.S. stocks finished broadly higher after shrugging off early weakness, with a late-day rally pushing major indices into positive territory as investors digested a stronger-than-expected Q2 GDP report and looked past some initial disappointment from Nvidia’s earnings. 

Key Takeaways 

• Late Rally Lifts Stocks: Equities overcame early losses to finish with solid gains, with the S&P 500 and Nasdaq both showing strength into the close. 
• Strong Q2 GDP: Preliminary Q2 GDP showed the U.S. economy grew at a +3.3% annualized rate, significantly beating the +3.1% estimate, though jobless claims were mixed and pending home sales fell. 
• NVDA Headlines Drive Volatility: Nvidia’s earnings met high expectations but initially disappointed on data center sales. However, reports that the company is in talks to sell its new Blackwell AI chips to China provided a positive catalyst. 
• Broad Gains, Defensives Lag: Six of eleven S&P sectors finished higher, led by Technology, Energy, and Communications. Defensive sectors like Consumer Staples, Real Estate, and Healthcare lagged. 
• Rate Cut Hopes Dip Slightly: The strong GDP data led to a slight reduction in the implied probability of a September Fed rate cut (down to ~84%), but a cut is still the base case. 
• Gold & Oil Gain: Gold prices climbed on underlying safe-haven interest and a stable Fed outlook, while oil prices also edged higher. 
• Yields & Dollar See-Saw: Treasury yields and the U.S. dollar were volatile, reacting to the mixed economic data and ongoing Fed policy speculation. 

Market Overview

U.S. equity markets navigated a volatile session today, ultimately finishing with solid gains after a strong late-day rally. The market initially grappled with mixed signals: Nvidia’s (NVDA) highly anticipated earnings, released after the close yesterday, met lofty expectations but a slight miss on data center sales created some initial disappointment. Simultaneously, a batch of pre-market economic data was released, with the preliminary Q2 GDP reading coming in much stronger than anticipated at +3.3%, while weekly jobless claims were also better than feared. This strong growth data initially caused some nervousness about the Federal Reserve’s path, and the implied probability of a September rate cut dipped slightly. 

Index	Up/Down	% Change	Last
DJ Industrials	71.67	0.0016	45637
S&P 500	20.46	0.0032	6501
Nasdaq	115.02	0.0053	21705
Russell 2000	2.77	0.0012	2376

Stocks were flattish to slightly lower for much of the morning, with neutral market breadth. However, sentiment turned more positive following new headlines suggesting Nvidia was in talks with the U.S. government to sell its next-generation Blackwell AI chips to China, potentially with a revenue-sharing agreement. This news seemed to overshadow the earlier data center concerns and reignited buying interest in the tech sector and the broader market. 

The rally gained momentum into the close, with all major indices finishing in the green. Market breadth improved to favor advancers, though small caps underperformed the large-cap rally. Technology, Energy, and Communications were the leading sectors, while defensive areas like Consumer Staples, Real Estate, and Healthcare lagged. The market’s ability to absorb strong economic data without derailing the rally suggests investors remain confident in an eventual Fed pivot, a narrative that will be heavily tested by today’s PCE inflation report.

Economic Data

Yesterday’s economic data was stronger than expected on the growth front, with a solid beat on Q2 GDP, though housing data remained soft. 

• Q2 GDP (Preliminary): +3.3% annualized (vs. +3.1% est.). 
• Consumer Spending +1.6%. GDP Price Deflator +2.0% (in line). 
• Core PCE Prices +2.5% (below +2.6% est.). 
• Weekly Jobless Claims: 229K (vs. 230K est., 235K prior). Continuing Claims 1.954M (vs. 1.97M est.). 
• Pending Home Sales (July): -0.4% m/m (vs. -0.24% est.). Index at 71.7. 
• Kansas City Fed Manufacturing (Aug): 0 (vs. -3 prior). 

Commodities, Currencies, and Treasuries 

Gold prices gained, with December futures settling up $25.70 (+0.75%) at $3,474.30 per ounce. With no major geopolitical shocks and mixed economic data that didn’t derail Fed cut expectations, the precious metal likely benefited from its inflation-hedge and diversification qualities, with its share of global reserves reportedly hitting a 30-year high. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.45	USD/bbl	64.6
Brent	0.57	USD/bbl	68.52
Gold	25.7	USD/oz	3474.3
EUR/USD	0.0046	USD	1.17
USD/JPY	-0.411	JPY	146.93
10-Year Note	-0.031	%	0.04207

Crude oil prices also saw a modest rebound, with October WTI futures settling up $0.45 (+0.70%) at $64.60/bbl. The stronger GDP data likely offset some demand concerns from the previous day. The U.S. dollar was volatile but finished largely flat ahead of tomorrow’s key PCE inflation report. Treasury yields were also mixed, reacting to the conflicting signals from the economic data. Bitcoin saw some profit-taking, falling over 1% after hitting a new all-time high earlier in the week.

Looking Ahead 

The market will be laser-focused on today morning’s release of the July Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. This report is the final major piece of economic data before the end-of-month options expiration and will be critical in shaping the market’s conviction in a September rate cut. With Q2 earnings season largely complete, macroeconomic data and any shifts in Fed policy expectations will be the primary drivers of market sentiment heading into next week.