There was a cautious air to US stock futures on Wednesday, 26 August 2026, as traders put in place their positions ahead of the Nvidia and PCE events. After a short-lived tech rebound, risk appetite has been curbed; investors know these two will have an outsized influence on the Fed’s path and any equity gains driven by AI.
Wall Street pauses before inflation and AI tests
The S&P 500 and Nasdaq-100 futures were down 0.1% and 0.2% respectively, with only the Dow Jones Industrial Average putting in a marginal 6 point or 0.01% gain. It was a quiet session following the chip-led bounce of the day before when Nvidia put an end to its seven-session slide in advance of results.
All eyes will be on the Fed’s preferred measure, the Personal Consumption Expenditures Price Index for July, at 8:30 a.m. ET. The consensus among economists is for a 0.1% monthly and 3.6% annual rise, a step up from June’s 0.1% dip and 3.7% year-on-year pace.
Nvidia’s results carry outsized sway
Analysts are forecasting that Nvidia will post stellar numbers for the fiscal second quarter ending July 31, with revenue and net income close to double what they were a year ago. Should the company beat estimates, it would do much to restore sentiment in the chip space which has been unsteady over valuation concerns.
Even with some weakness of late, Nvidia is still 14% higher this year. Put that against the 34% it put on at this time last year or the 150% plus surge of 2024. Yet there is wariness among investors as to how long the AI trade can hold given elevated rates, geopolitical headwinds and stubborn inflation.
What investors will track next
With those two market movers in play, desks are focused on a handful of things:
– The underlying trends in the July PCE at 8:30 a.m. ET
– Any tone Kevin Warsh strikes at Jackson Hole on Friday
– Nvidia’s Q2 report and guidance
Bonds firm while dollar softens
Treasuries have held onto Tuesday’s gains on the back of an oil-induced cooling of risk. Yields had been at multi-year highs last week, the 30-year notching its highest in almost 20 years, but the 10-year gave back nearly 8 basis points on Tuesday.
That has done nothing to put life back in the US dollar. The greenback was found near a three-month low as investors digested the Treasury’s wider debt buyback and the growth-inflation picture.
Federal Reserve Chair Kevin Warsh will be at the microphone in Jackson Hole on Friday. While he is not thought to give a clear steer on the September decision, market participants will be looking for policy cues in his words.
Oil slides as Iran headlines ease supply fears
Crude has given up ground after it became apparent the US sanctions on Iran were not as hard-line as the market feared. Benchmark US crude was $2 lower at $79.73 a barrel, making it a third day of losses and giving the bond rally some help.
Brent followed suit for a third day running, off $3 to $84.56. US Treasury Secretary Scott Bessent made it clear that nations doing business with Tehran would be given a deadline to wind things down or else face unilateral action.
Iran also put pressure on prices by resuming talks with Oman over the Strait of Hormuz. A joint statement from the foreign ministers outlined a framework for a temporary navigational corridor and an accord to see the strait cleared of mines.
Why it matters for positioning
Two levers are at work in the near term. The PCE will set the interest rate story that supports equity multiples, and Nvidia’s print may well confirm or put in doubt the premium on AI names. Anything better than expected could be the spark for a wider chip rally.
Investors are also having to weigh the cross-currents of a weaker dollar, sensitive energy prices and easing yields. With no firm policy direction coming out of Jackson Hole, one might expect positioning to remain tight until the hard data and earnings come in.
It is a compact timetable. PCE comes in on Wednesday morning, Nvidia will have its say after the US close, and we will hear from Warsh on Friday. As summer trading thins and the risk of volatility mounts, the stakes for both sector leadership and rate expectations are high.
