Three catalysts drove the tape this week: Kevin Warsh‘s hawkish Jackson Hole debut, Nvidia Corp. (NASDAQ:NVDA)‘s blowout quarter, and a cybersecurity rally that rewrote the software trade.
Warsh Doubles Down On The Inflation Fight
Federal Reserve Chair Kevin Warsh used his first Jackson Hole keynote to deliver the most hawkish message the central bank has issued in months, pressing on three fronts.
On inflation, Warsh reaffirmed the 2% PCE target as “a firm, fixed target,” clarifying earlier ambiguity from one of his internal task forces about the preferred gauge.
He said summer’s better-than-expected prints “do not tell me that underlying trends have meaningfully improved.”
Core PCE — the Fed’s favorite gauge — is tracking at 3.7% over the trailing twelve months and 4.1% annualized over the past six.
On financial conditions, Warsh said he would struggle to describe current conditions as restrictive, citing credit spreads near historic tights and easy bank lending standards.
The subtext: there’s room to hike from here.
On labor, Warsh flagged the 4.1% unemployment rate as consistent with full employment, removing the traditional dovish trigger for cuts.
Hawkish Repricing Rips Through Rates
The rate reaction was textbook hawkish repricing, with the short end selling off far more aggressively than the long end as the market priced in hikes at the front of the curve.
CME FedWatch swung sharply.
The probability of a September 16 hike jumped to 57.5%, up from 39.9% one week earlier and just 24% one month ago.
The U.S. Dollar Index rallied to 99.5 levels on Friday, extending the rebound from the August 21 three-month low of 98.8.
Nvidia: Blowout Print, Best Day Since April 2025
Nvidia Corp. (NASDAQ:NVDA) reported second-quarter 2027 revenue of $96.2 billion after Wednesday’s close, up 106% year-over-year and beating the $92 billion consensus by 4.5%.
Third-quarter guidance came in at $108 billion, roughly $4 billion above the Street. Data-center revenue continued its parabolic trajectory.
Shares closed 8.74% higher on Thursday, the biggest single-session gain since April 2025, as the AI demand narrative overwhelmed the margin concern.
On Friday, the stock gave back nearly half of those gains amid broader tech weakness on Warsh’s remarks.
CrowdStrike Prints All-Time Single-Day Record
The most violent sector move of the week came from cybersecurity.
CrowdStrike Holdings Inc. (NASDAQ:CRWD) surged 20.5% Thursday, the biggest single-day gain in the stock’s history, on a record second-quarter print.
Net new annual recurring revenue jumped 51% year-over-year to a record $333 million — the sixth straight quarter of acceleration.
Falcon Flex ARR crossed $2.29 billion, up 101% year-over-year. Management pitched AI-driven demand as the “Mythos Moment,” positioning AI agents as both an expanding attack surface and a driver of demand.
The broader Global X Cybersecurity ETF (NASDAQ:BUG) rallied nearly 6%.
Salesforce Inc. (NYSE:CRM) was the S&P 500’s top-performing name for the week after delivering a blowout quarter.
Adjusted EPS of $5.90 crushed the $3.27 consensus — an 80% beat.
Revenue of $11.35 billion grew 11%. Management lifted fiscal-year 2027 adjusted EPS guidance to $16.67-$16.71, well above the $14.16 Street.
Salesforce unveiled “Claudeforce,” a deepened Anthropic partnership making Claude the default AI model across Slack and core Salesforce products, and booked a $2.6 billion mark-to-market gain on its Anthropic stake.
The Week Ahead
Attention shifts to the U.S. labor market, with the BLS Employment Situation report for July anchoring the calendar next Friday and ISM PMIs also on deck.
Warsh’s hawkish read on employment gives Friday’s payrolls report added weight — a hot print would cement September hike odds above 60%, while a soft one would test his framework directly.
Image: Shutterstock
Recent Comments