U.S. stocks finished higher today, with the Dow up 0.20%, S&P 500 up 0.72%, Nasdaq up 1.57%, and Russell 2000 up 0.28%. The headline gains, however, overstated the strength of the broader market. Most sectors finished lower and the equal-weight S&P 500 lagged the traditional index by more than one percentage point.
Technology drove the session. Semiconductors rallied following Nvidia’s earnings, while software had one of its strongest days in years after upbeat reports from CrowdStrike, Salesforce, Okta and Veeva. Retail, financials, healthcare, industrials and several consumer groups were weaker.
Treasury yields edged higher, while oil gained 1.6%. Gold was little changed, silver rose more than 2%, and Bitcoin hovered near $80,000.
Nvidia Reinforces the AI Growth Story
The biggest catalyst was Nvidia, which delivered another strong quarter and, more importantly, said it expects revenue to grow roughly 70% in fiscal 2028, well ahead of current expectations.
Management also suggested demand could be closer to 100% growth if supply were not constrained. That helped reassure investors that the AI infrastructure buildout still has considerable momentum despite recent concerns about excessive spending, financing structures and whether customers will generate adequate returns on their investments.
Nvidia shares rose nearly 9%, while several other AI-related stocks moved higher.
Software Pushes Back Against the AI Disruption Narrative
Software was arguably the other major story.
CrowdStrike reported accelerating recurring revenue and strong demand for its AI security products. Salesforce showed improving growth and highlighted its new Claude-powered AI offering. Okta delivered strong core results while pointing toward greater AI monetization ahead. Veeva also reported encouraging early demand for its Falcon AI agents.
The takeaway was important: investors have spent much of the year debating whether AI will disrupt traditional software companies. Today’s results provided evidence that at least some established software platforms may instead be able to use AI to strengthen their products, improve growth and create new revenue streams.
Retail Tells a More Mixed Story
The consumer side of the market was less encouraging.
Dollar General was the standout, beating expectations and raising guidance. But Burlington, Best Buy and Dollar Tree all fell despite generally respectable results.
The pattern continues to suggest that consumers are still spending, but they remain selective and price-sensitive. Retailers are increasingly relying on promotions, pricing investments and tariff refunds to protect demand, making execution more important as the year progresses.
Rates and the Fed Remain the Next Big Question
Economic data were fairly quiet. Initial jobless claims remained low at 203,000, reinforcing the view that layoffs remain limited. The goods trade deficit widened more than expected.
Fed officials continued to sound cautious on inflation. Cleveland Fed President Beth Hammack again argued that rates may need to rise, while Kansas City Fed President Jeff Schmid said policy is not particularly restrictive.
That puts the spotlight squarely on Fed Chair Kevin Warsh’s Jackson Hole speech tomorrow morning. Investors will be watching closely for any clues about how the Fed balances persistent inflation against signs of softer employment growth.
Here’s Our Take
Today’s rally was encouraging, but it was also very concentrated. Nvidia and software carried the market while most other sectors declined.
The good news is that the fundamental AI story continues to hold up remarkably well. Nvidia’s outlook suggests demand for computing infrastructure remains exceptionally strong, while this week’s software results show that AI may create winners within traditional software rather than simply disrupt the entire sector.
The bigger question is whether that strength can broaden beyond technology. Retail results remain uneven, rates remain elevated and the Fed’s next move is still uncertain.
For now, earnings continue to support the bull case. But with technology again doing much of the heavy lifting, tomorrow’s Jackson Hole speech could determine whether investors remain comfortable paying up for growth or begin demanding a broader and more balanced market advance.
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