Markets hold steady ahead of Nvidia earnings as Fed drama and geopolitics simmer

• Mood shifts – stocks go from RED to GREEN.
• It’s all about NVDA – after the bell.
• Oil slips back, Gold trades up, Bonds unchanged.
• Will Lisa Cook puts the FOMC meeting in jeopardy?
• Try the Easy Oven Roasted BBQ Thighs.

Yesterday morning’s sour mood – ended up turning sweet – investors, traders and algo’s dug deep to try to find something good in all of the recent turmoil….and while trading volumes were low, (only 14 billion shares) the indexes did end higher, but don’t be fooled – there is still some nervousness simmering on the back burner.

By the end of the day –by the end of the day, while the indexes did swing from red to green, my gut says be patient with new money. The Dow took back 135 of the 350 pts it lost on Monday, the S&P took back 26 of the 28 pts it lost on Monday the Nasdaq added 95 pts or 0.4% (think NVDA earnings today, the stock added +1%), the Russell took back 19 of the 22 pts it lost on Monday, the Transports only added back 48 of the 287 pts it lost, the Equal Weight S&P only added 5 of the 60 pts it lost while the Mag 7 tacked on another 120 pts to the 112 it gained on Monday.

Remember – we are in the last week of summer – Labor Day weekend is this coming weekend, many participants are away from their desks, so the volumes don’t reflect the complete picture.

Of the 11 S&P sectors – it was the Industrials that took charge – the XLI rising 1%, names like BA +3.5%, GEV + 3.9%, RTX + 2.5%, GE +2.5%, UBER +1.5% leading the ETF higher. Financials up 0.8%, Healthcare went up 0.6%, Tech and Consumer Discretionary both gained 0.5%, Utilities and Basic Materials added 0.3%, while Consumer Staples lost 0.6%, Communications lost 0.4%, Real Estate lost 0.3% while Energy lost 0.2%.

The focus today is all about NVDA – set to report after the bell and it has investors/traders and algo’s sitting on the edge of their seats.

Given NVIDIA’s role as the bellwether for AI and its outsized influence on the broader market, everyone is making some kind of bet. The question isn’t if they meet consensus, but by how much they beat. Jensen Huang has a track record of topping expectations, though recent beats have been narrower — raising the bar for a real surprise.

Why does it matter? Because NVIDIA’s results are a direct read on AI demand. The data center segment (~89% of revenue) is the key driver. Any shortfall could reignite “AI bubble” chatter, while a strong beat fuels more optimism.

Street expectations: EPS $1.01 (+47% y/y) and revenues $45.8–$46.2B (+52% y/y). But guidance is critical — especially whether it factors in H20 chip sales to China. Analysts see Q3 guidance around $52.5B (+50% y/y) and EPS of $1.11 (+47% y/y). Watch commentary on Blackwell and Blackwell Ultra GPUs, export licenses, and geopolitical headwinds.

China is the wild card. Sales of the H20 chips resumed in July under a 15% revenue-sharing agreement with Washington. With China’s AI market pegged at $50B+ in 2025, any hint of softness there could swing the stock.

Other key items: Gross margins (~71%) – proof of operational efficiency and pricing power. Hyperscaler demand updates – MSFT, AAPL, AMZN, META all announced massive AI capex, and NVDA is the clear beneficiary.

The options market is pricing a 6.5% ($12) move either way. Miss and it’s down $12, surprise and it’s up $12. This morning it’s up $1 in the pre-market at $182.60.

Bonds ended flat….. Oil fell giving back all of Monday’s gains… (and then some) after investors reassessed the ongoing conflict in Moscow. Monday’s push higher was credited to a risk premium, now yesterdays sell off is being credited to risk ‘aversion’ – in the end, it is what it is and given the amount of noise in the oil patch caused by the ongoing conflict, investors will remain skittish. Oil remains anchored between the trendlines at $62.45/$65.10 – this morning it is down 25 cts at $63.10.

Now, while we have backed off of kissing trendline resistance – we still have to deal with the possible secondary sanctions on countries buying Russian oil (think India and China) – because those do appear almost inevitable. If they are imposed then oil should rise and a break above the long-term trendline at $65.10 – leaving it ready to test $70 — reigniting inflation fears and creating one more issue for JJ to consider when deciding the next move for monetary policy.

Gold rallied yesterday – rising $25 to end the day at $3,443. Was it Russia or was it the drama at the FED now…. (think Lisa Cook). While I am in the camp that it is more geo-political rather than just political – in any event - it too is what it is….In any case, if the move is because of the drama surrounding Lisa Cook – that should be short lived…..because right now, she isn’t going anywhere, JJ has not put her on paid leave and her lawyer has made it clear that they are going to fight Trump to the end.

US futures are a bit higher… Dow +20, the S&P’s +2, the Nasdaq is +5 while the Russell is -4.

The spotlight is all about the AI trade today…and what NVDA will say next that shocks the industry……The subplot will be about the drama at the FED and how this may impact the September FOMC meeting. Will Lisa Cook vote against any rate cut – just to spite Trump? (That’s assuming she is still in the seat). Stevie Miran has been nominated to take the seat vacated by Adriana Kugler – who unexpectedly resigned to take a job at Georgetown - leaving us to wonder if she has multiple ‘primary residences too’?

Miran’s hearing is scheduled for early next week and he is expected to be confirmed before the next FOMC meeting. So, the drama continues.

We are in the final week of summer – volumes will remain low which means moves will be exaggerated. Honestly, unless you are playing in the NVDA space, there isn’t much else to do until after the holiday. It will all be here when you return.

The S&P closed at 6,465 — up 26 pts. We are once again teasing new all-time highs…. (6,481 on August 15^th) and while we might kiss it – I think it gets rejected. September is a volatile month that usually ends a bit lower….. The recent action shows that having a plan is important.

Oven roasted BBQ thighs

This is a great weekend BBQ dish…easy to make and feeds a crowd.

For this you need: Thighs – skin on. Sliced yellow onions, Olive Oil, garlic, s&p and adobo (Spanish seasoning in the condiment aisle) and Sweet Baby Ray’s original BBQ sauce.

Begin pre-heating your oven to 350 degrees.

Rinse the thighs and pat dry with a paper towel. Season with s&p and adobo and then massage with some olive oil.

Place the sliced onions on the bottom of a roasting pan. Place the thighs on top, cover with foil and place in the oven and bake for 40 mins.

Now remove the foil, if there is a lot of juice, remove some of it, not all of it, with a ladle. Now dress with the Sweet Baby Ray’s BBQ sauce – making sure to hit all the chicken pieces.

Place back in the oven uncovered for 10 mins.

Now, turn on the broiler and leaving the pan in the middle rack - broil for 5 – 8 mins. You want it to crisp up a bit.

Remove and serve on a platter. Have a big mixed green salad on the side.