WEDNESDAY MARKET UPDATE

NVIDIA + PCE DAY

Today decides the rest of the summer. PCE at 12:30pm. Nvidia after the close. Consumer confidence dropped to 89.4 yesterday — below expectations. The forward-looking expectations index crashed 5.8 points to 68.2. Consumers are pessimistic about jobs and business conditions six months out. Oil dropped 3%. The 10-year fell to 4.625%. Hormuz reopening hopes are easing inflation fears. Gold is at $4,652 and heading back toward $4,700. Everything converges today.

-Nathan Reed

HORMUZ REOPENING HOPES. OIL −3%. GOLD DOESN'T CARE. AGAIN

Hormuz may be reopening. FXStreet reported that “renewed optimism surrounding the reopening of the Strait of Hormuz continues to weigh heavily on oil prices, easing inflation fears and weighing on Fed interest rate hike expectations”.

Oil dropped 3% Tuesday. Brent is back below $90. If the strait opens — even partially — the inflation trigger that hawks have been clinging to for six months evaporates. The September hike dies. And gold runs.

But gold isn't waiting for the strait. It's already at $4,652. The metal has completely decoupled from oil. In January, gold moved with oil — both up on war fear.

In August, oil is falling and gold is rising. The driver has shifted from geopolitics to fiscal policy: Treasury buybacks, $40 trillion in debt, gold ETF inflows, central bank accumulation. Gold doesn't need the war anymore. It has the balance sheet.

PCE at 12:30pm is the inflection point. Consensus is 3.3% core, matching June. If it cools to 3.2% or below, September hike odds drop below 30% and gold tests $4,700 before Warsh speaks Friday. If it's hot — 3.4% or above — the hawks revive and gold pulls back to $4,550. The range is $150 wide. The data decides in three hours.

NVIDIA AFTER THE CLOSE. THE $3 TRILLION QUESTION

Nvidia snapped its 7-day losing streak Tuesday, rallying 2% into the report. JPMorgan reiterated its $240 target — implying 78% upside. CrowdStrike also reports tonight. The semiconductor ETF has been bleeding for two weeks. The Magnificent Seven were down over 1% last week.

The entire AI narrative rests on tonight's numbers. Revenue, data center guidance, Rubin chip timeline, China exposure, and the capex question: are hyperscalers still spending?

If Nvidia crushes it, tech leads the market into September and the S&P targets 8,000. If Nvidia disappoints, the rotation out of tech into gold, energy, and defensives — which started with Walmart's crash — becomes a full-blown sector shift.

The consumer is cracking (confidence at 89.4). The old economy is weakening (NFP −23K, retail sales −0.6%). The only thing holding equities up is AI capex. Tonight we find out if it's enough.

What to watch:

“Consumer confidence fell. Consumer expectations crashed. Oil dropped 3%. The 10-year fell below 4.65%. Everything is pointing the same direction: the economy is slowing, inflation pressure is easing, and the Fed's case for hiking is evaporating in real time. If PCE confirms it at 12:30, gold breaks $4,700 today and Warsh arrives at Jackson Hole with nothing to fight about. That's the setup. Now we wait for the number”

CROWDSTRIKE, SNOWFLAKE, ARM HOLDINGS

CrowdStrike  $CRWD ( ▼ 2.78% ) — cybersecurity in a sanctions economy; government contracts expanding as Bessent weaponizes the dollar system; the security play alongside Nvidia.

Snowflake  $SNOW ( ▼ 1.78% ) — AI data cloud; enterprise consumption metric; the pre-Nvidia read on whether AI spending is broadening beyond hyperscalers.

ARM Holdings  $ARM ( ▲ 1.16% ) — chip architecture licensor; ARM's revenue tracks with Nvidia's data center expansion; a derivative play on tonight's numbers.

Agnico Eagle  $AEM ( ▲ 2.86% ) — senior gold producer benefiting from $4,650 spot; record free cash flow at these prices; the miner rally is broadening beyond NEM and GOLD.

iShares TIPS Bond ETF  $TIP ( ▲ 0.36% ) — TIPS breakevens are the market's inflation expectation; if PCE cools and breakevens fall, gold rallies on lower real yields.

For real-time data, I recommend monitoring Finviz.

CONSUMER | Consumer confidence: 89.4 — below 90.2 consensus; expectations index crashed 5.8 pts to 68.2; consumers pessimistic about jobs and business conditions.

OIL | Hormuz reopening hopes — FXStreet: “renewed optimism surrounding the reopening”; WTI −3% Tuesday; Brent below $90; inflation trigger easing.

RATES | 10Y yield: 4.625% — down 7bps Tuesday; Treasury may use $1T General Account for more buybacks (CNBC); yields falling = gold rising.

NVIDIA | Nvidia: rallied 2% Tuesday — snapped 7-day decline; JPM $240 target (+78%); semis −4% last week; the report either confirms the AI thesis or breaks it.

FED | September hike: 33% — 67% hold; PCE at 12:30 is the last inflation read; Warsh Friday is the last policy signal; two days decide September.

PCE at 12:30. Nvidia after the close. GDP tomorrow. Warsh Friday. Gold at $4,652. This is the day. Stay sharp.

Nathan Reed | Profits & Insights