Morning Brew August 27 2026

Good morning.               

Today’s focus is on Nvidia’s earnings reaction

Nvidia delivered another strong quarter, with revenue ahead of expectations, guidance above consensus and management pointing to around 70% revenue growth in fiscal 2028, compared with current expectations closer to 45%. Demand remains stronger than available supply.

The main pressure points were margins and cash flow. Higher memory costs are expected to move gross margins down toward 71–72%, while free cash flow fell sharply quarter-on-quarter. Higher long-term yields remain an additional valuation headwind for Nvidia and other long-duration AI names.

The initial share-price reaction was volatile, with Nvidia first falling in after-hours trading before moving higher to 220 . The market reaction today will show how much of the strong guidance had already been priced in.

Nvidia earnings AI boom meets margin test | Saxo Bank Switzerland

U.S. inflation was slightly firmer than expected. Headline PCE rose 0.2% month-on-month in July after a 0.1% decline in June, while core PCE also increased 0.2%. On a year-on-year basis, headline PCE held at 3.7%, just above the 3.6% expected. Durable goods orders rose 1.1% month-on-month, the strongest increase since April and above the 0.5% forecast.

After the data, market pricing for a September rate hike fell to around 35%.

U.S. equities finished little changed. The S&P 500 closed at 7,675.70, the Dow slipped 0.2% to 53,463.88, and the Nasdaq Composite was nearly flat at 26,130.20. After hours, Nvidia gained on stronger guidance, CrowdStrike rose after beating expectations and raising guidance, and Salesforce moved higher after better earnings and an improved revenue outlook.

Meta agreed to pay USD 18 billion to settle U.S. lawsuits linked to children’s social-media addiction claims.

Shein is expected to price its Hong Kong IPO near the midpoint of the marketed range, raising around USD 1.7 billion and valuing the company at roughly USD 26.5 billion.

The U.S. said it had disrupted a Chinese hacking operation that targeted several government agencies, including the Justice Department, NASA, the Federal Reserve and the Senate.

Asian equities opened stronger, helped by Nvidia’s long-term revenue outlook. South Korea led the move, with gains concentrated in major semiconductor names including SK Hynix and Samsung Electronics.

The U.S. dollar strengthened on Wednesday as firmer inflation and higher yields supported rate differentials. USD/JPY traded around 159.30, EUR/USD is near 1.1650, cable around 1.3590 and USD/CHF around 0.8050.

Gold is up 7.8% year-to-date. ETF inflows continued for a fourth consecutive session, while combined inflows into gold and Bitcoin ETFs reached a record USD 7 billion over the past five trading days. Gold trades around 4,618 and silver around 69.

Oil remains under pressure, with WTI below USD 82 and Brent below USD 88. Prices briefly rose on renewed Russia-Ukraine headlines before reversing, while Cushing inventories increased for the third time in four weeks.

Today the focus will be on digestin Nvidia, Charu`s initial take is:

Nvidia’s report removes one near-term concern around demand. The AI infrastructure cycle is still expanding, Rubin is entering production, and supply remains the main constraint. It does not remove the valuation debate. The next test is margins and cash conversion as the business scales. Hyperscalers also need to show that rising AI expenditure can generate adequate returns, especially while long-term yields remain elevated. For Nvidia and the wider AI ecosystem, the focus is shifting from whether growth exists to where the economics of that growth settle.

The agenda is light today, with attention shifting to Jackson Hole and Kevin Warsh’s speech tomorrow at 16:00 CET. Markets will look for any signal on how much guidance the Fed intends to provide under his new communication approach – how close will he pay his cards? There are indications he will speak about the inflation and labor-market outook.

Thursday, 27 August 2026

Macro: U.S. initial jobless claims.
Central banks / speakers: Jackson Hole Economic Policy Symposium begins.
Corporate earnings: Best Buy, TD Bank, Dollar Tree, Workday.