Week Ahead: Nvidia and inflation under the spotlight

We head into the last week of August and summer holidays with markets likely to digest Fed Chair Powell’s speech from Jackson Hole. There will be a lot of inflation data, out of Australia, European countries and the US to watch, while Nvidia second quarter earnings is now a big risk event, on a par with any top tier economic data release. Price action hasn’t been especially choppy over the past few weeks, with the VIX volatility measure, known as Wall Street’s fear gauge falling through August to levels below the long-term average. We head into a new month, with September traditionally being seen as a volatile one for risk markets especially.

Jackson Hole didn’t disappoint in terms of market reaction as Powell opened the door to a September Fed rate cut. The build-up had seen stocks sell-off and the dollar go bid in anticipation of a moderately hawkish Powell and push back against the high chance of a September move. But ultimately, the Fed Chair put greater emphasis on the weakening labour market over rising inflation and a possible one-time price adjustment due to tariffs. We still have one more NFP and CPI report before the mid-September FOMC meeting, but markets are pleased with the dovish pivot with stocks rebounding strongly and looking likely to print fresh record highs this week. On the flip side, the dollar may continue to struggle further, with weaker growth momentum and unsustainable fiscal policy adding to the mix.

Of course, stocks will have one eye on the release of the results from the biggest company on the planet, after the US closing bell on Wednesday. Nvidia represents roughly 8% weight in the benchmark S&P 500 and was the first business to top $4 trillion in market value. It is the AI bellwether regarding demand and spending and where Nvidia goes, so does the market. That means investors will particularly focus on any chat around the demand side after other megacap tech stocks recently upped their capex guidance. Comments around the impact of the deal with the Trump administration which gives the government 15% of revenue from China sales will also be key.

In Brief: major data releases of the week

Wednesday, 27 August 2025

– Australia CPI: July headline inflation is expected to rise 0.5% m/m and 2.3% y/y. The RBA’s August forecasts predicted headline CPI would move above 3% in the second half before cooling. The trimmed mean is likely to remain at the upper end of the target range at 2.7%.

– Nvidia Earnings: EPS is expected at $0.99, a rise of 48% on revenue of $45.9bn. Data centres are by far the biggest driver, with revenues seen of more than $40bn. Focus will be on China commentary after the government deal to take 15% of any of its revenue. NVDA currently has around a near 8% weighing in the S&P 500.

Thursday, 28 August 2025

– ECB Minutes: The ECB is seen in a ‘good place’ regarding policy according to President Lagarde, even though there could be a temporary inflation undershoot. Any chat about FX levels will be of interest. 

Friday, 29 August 2025

– Tokyo Inflation: This data is the forerunner to nationwide inflation and is forecast to ease to 2.6% y/y from 2.9%. But the core print is seen above 3%, while sticky services inflation will also be watched. There’s currently around a coin flip chance of an October BoJ rate hike. 

– European country-wide Inflation: The flash August inflation data from Germany, France, Italy, and Spain is released ahead of the euro area data. The region’s inflation is expected to increase to 2.1% y/y in August from 2.0% y/y in July driven by an increase in energy inflation, while core inflation is forecast to remain unchanged at 2.3% y/y.

– US Core PCE: The Fed’s favoured inflation metric is forecast to remain steady at 0.3% m/m in July. That lifts the annual rate one-tenth to 2.9%. Components from CPI and PPI that feed into this data saw modest increases.

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