Wall Street Posts Second Straight Gain Despite Nvidia
Nvidia’s third-quarter guidance reflected expectations of slowing AI-driven growth, amid ongoing trade tensions between the U.S. and China.
Quick overview
- Wall Street saw gains on August 27, with the Dow Jones and S&P 500 reaching record highs, driven by technology and energy stocks.
- Nvidia reported strong fiscal second-quarter results but issued cautious third-quarter guidance, leading to a decline in its shares after hours.
- Investor focus was also on the political controversy surrounding Federal Reserve Governor Lisa Cook, who plans to sue President Trump over allegations of mortgage fraud.
- Trump's attempts to influence the Federal Reserve have raised concerns about its independence and the credibility of U.S. economic policy.
Wall Street posted fresh gains on Wednesday, August 27, with technology and energy stocks leading the session and both the Dow Jones and S&P 500 closing at record highs.
Investor attention was firmly on Nvidia, widely viewed as a bellwether for the artificial intelligence (AI) boom, which released its fiscal second-quarter results after the market close.
The Dow Jones Industrial Average rose 0.32% to 45,565.05 points, the S&P 500 gained 0.21% to 6,479.76, and the Nasdaq Composite advanced 0.21% to 21,590.14.
Fed Independence Under Scrutiny
Markets were also tracking developments around U.S. President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook from her position, accusing her of mortgage fraud.
Cook has denied the allegations and stated she intends to sue Trump in order to remain in her post, setting the stage for what could be a lengthy legal battle. Her current term on the Fed’s Board of Governors runs until 2038.
The move comes amid mounting pressure from Trump and his allies for the Fed to cut interest rates immediately, a step the central bank has resisted given ongoing concerns about inflation and labor market conditions.
Trump’s push to reshape the Federal Reserve has raised questions over its independence and the long-term credibility of U.S. economic policy. Traditionally, the Fed has operated free from direct political interference, with most past presidents largely avoiding intervention in its affairs.
Nvidia Earnings and Results
Nvidia’s third-quarter guidance reflected expectations of slowing AI-driven growth, amid ongoing trade tensions between the U.S. and China.
For the fiscal second quarter, covering May to July, Nvidia reported net income of $26.42 billion and revenue of $46.74 billion—year-over-year increases of 59.2% and 55.6%, respectively. Despite the strong results, shares fell 3.2% in after-hours trading due to weaker-than-expected forward guidance.
The company projected Q3 sales of $54 billion, below market expectations of around $60 billion, highlighting a more cautious outlook for AI growth. The forecast also assumes no shipments of its H2O processors to China, reflecting the impact of trade restrictions on the chipmaker’s expansion plans.
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