Nasdaq Jumps 0.84% as Nvidia's 7.4% Surge Fuels AI Rally; Dow Holds Steady at 53,485
Authored By HDFC SKY | Last Modified: Aug 27, 2026 09:20 PM IST
Mumbai, Aug 27: The Nasdaq Composite led US stock market gains on Thursday, rising 0.84% to reach 26,350.67, as semiconductor giant Nvidia’s blockbuster earnings rekindled investor confidence in the artificial intelligence trade. The tech-heavy index advanced 220.47 points during the opening session, while the S&P 500 climbed 0.32% to 7,700.08, adding 24.38 points. The Dow Jones Industrial Average remained largely flat, edging up 0.04% to 53,485.06, with a modest gain of 21.18 points.
Market sentiment received a significant boost from Nvidia’s fiscal second-quarter results, which showed revenue more than doubling year-on-year and an optimistic growth forecast that eased concerns about a potential slowdown in AI-related spending. The positive momentum extended across the semiconductor sector, with major chipmakers recording substantial gains in early trading.
The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, declined 0.59% to 15.12, reflecting reduced market anxiety as investors digested the latest earnings reports and looked ahead to the Federal Reserve’s annual Jackson Hole Economic Symposium beginning Thursday.
Nvidia Surges 7.4% as Revenue More Than Doubles to $96.2 Billion in Q2
Nvidia Corporation emerged as the standout performer, with shares jumping 7.40% in early trading as investors reacted to results that exceeded market expectations. The chipmaker’s revenue for the May-July quarter more than doubled to $96.2 billion, while adjusted earnings came in at $2.22 per share, surpassing analyst projections.
The company’s data centre segment, which represents its core AI chip business, delivered particularly robust performance with revenue reaching $89 billion, representing a 117% year-on-year increase. Edge computing revenue also showed strong growth, rising 27% to $7.2 billion compared to the previous year.
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Chief Executive Officer Jensen Huang highlighted the accelerating demand for the company’s artificial intelligence accelerators, stating that the appetite for AI computing continues to expand. The company’s fiscal second-quarter performance demonstrated its dominant position in the AI chip market, with its products remaining essential infrastructure for cloud providers and enterprises developing AI applications.
Chief Financial Officer Colette Kress provided an upbeat outlook during the post-earnings conference call, projecting that the company expects revenue growth of approximately 70% in fiscal 2028. This forecast significantly exceeded analyst expectations of 44% growth for that period, according to data compiled by LSEG. Kress noted that while demand is robust, the company’s growth remains constrained by supply limitations.
US Jobless Claims Fall to 203,000 Amid Stable Labour Market Conditions
The US Department of Labor reported that initial jobless claims for the week ended August 22 totalled a seasonally adjusted 203,000, declining by 4,000 from the previous period and falling below the Dow Jones consensus estimate of 208,000. The lower-than-expected reading indicated continued stability in the American labour market despite ongoing economic uncertainties.
Continuing claims, which track the number of individuals receiving ongoing unemployment benefits, fell by 18,000 to 1.78 million for the week ended August 15. This reduction in continuing claims suggested that unemployed workers are finding new employment opportunities, contributing to overall labour market resilience.
The four-week moving average for jobless claims edged up slightly to 205,500 from 204,250, a modest increase that remains within the range consistent with a healthy labour market. The claims data provides a real-time indicator of layoffs and hiring trends, with the current levels indicating that employers continue to retain workers despite broader economic headwinds.
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The jobs report precedes Federal Reserve Chair Kevin Warsh’s keynote address at the Jackson Hole symposium, where market participants anticipate signals regarding the central bank’s policy direction. The labour market data will factor into the Fed’s assessment of whether the economy can withstand further policy adjustments without causing undue employment disruptions.
Semiconductor Stocks Rally Broadly as AI Optimism Sweeps Sector
The semiconductor sector experienced broad-based gains following Nvidia’s earnings, with major chipmakers recording substantial increases in early trading. Broadcom advanced 2.99%, while Marvell Technology gained 1.76%, reflecting renewed investor appetite for companies positioned to benefit from continued AI infrastructure spending.
International chipmakers also participated in the rally, with Arm Holdings adding 4.81% and South Korea’s SK Hynix rising approximately 4% in overseas trading. The VanEck Semiconductor ETF gained 3.5%, while the iShares Semiconductor ETF advanced 3%, underscoring the broad-based nature of the sector’s recovery.
The positive sentiment extended to other semiconductor-related stocks, with Intel rising 2.82% and Palantir Technologies gaining 3.92%. Micron Technology recorded a modest increase of 0.02%, while Advanced Micro Devices remained largely unchanged, slipping a marginal 0.01%.
Analysts expressed continued confidence in the broader AI growth story, describing it as a key driver of their positive market outlook. The investment bank acknowledged ongoing concerns regarding the sustainability of AI capital expenditure but noted that second-quarter earnings season had demonstrated the robustness of underlying fundamentals.
Salesforce Jumps 17.2% as Guidance Eases SaaS Growth Concerns
Salesforce emerged as another major gainer, with shares surging 17.17% in early trading after the software company’s strong guidance helped alleviate concerns about its position in the AI race. The company reported fiscal second-quarter revenue that exceeded Wall Street’s forecasts, while its outlook for the coming quarters provided additional reassurance to investors.
The company raised its full-year revenue guidance to between $46.1 billion and $46.4 billion, reflecting anticipated growth of 11% to 12% year-on-year. This upward revision came from the previous range of $45.9 billion to $46.2 billion, indicating increased confidence in the company’s business trajectory.
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For the third quarter, Salesforce guided for revenue between $11.42 billion and $11.5 billion, exceeding the midpoint estimate of $11.4 billion compiled by S&P Global Market Intelligence. The company expects earnings per share in the range of $1.81 to $1.83 for the quarter.
The stock’s gains accelerated following news that Salesforce is expanding its partnership with AI startup Anthropic to launch Claudeforce, integrating the Claude model directly into the Salesforce platform. RBC research analyst Rishi Jaluria noted that the company had successfully calmed market fears about its AI competitiveness, though he acknowledged there remains a long road before investors may view it as an AI winner.
CrowdStrike Shares Soar 15.6% on Record Quarterly Performance
Cybersecurity firm CrowdStrike delivered an exceptional performance, with shares jumping 15.63% after the company reported record net new annual recurring revenue of $333 million in the second quarter. Chief Executive Officer George Kurtz described the period as the best quarter in the company’s history, highlighting the growing market acceptance of AI-driven security solutions.
The company’s annual revenue forecast of $6.60 billion to $6.61 billion came in above Wall Street’s estimates of $5.93 billion, demonstrating confidence in sustained growth. For the second quarter, CrowdStrike reported total revenue of $1.47 billion, exceeding the estimated $1.43 billion, while earnings per share of $0.01 aligned with analyst expectations.
Kurtz emphasised the transformative impact of what he termed the “Mythos moment,” suggesting that widespread adoption of AI has created unprecedented demand for cybersecurity solutions. The company’s strong performance reflects the increasing recognition that AI deployment requires robust security infrastructure, presenting what Kurtz described as the largest market opportunity in the company’s history.
The positive results from CrowdStrike contributed to broader gains in the software sector, with the iShares Expanded Tech-Software Sector ETF adding 1.6% in pre-market trading. The company’s success highlights the growing intersection between artificial intelligence deployment and cybersecurity requirements.
Kansas City Fed President Schmid Warns Inflation Remains Stubborn
Kansas City Federal Reserve President Jeffrey Schmid offered a cautious assessment of the inflation outlook during an interview with CNBC from Jackson Hole, describing price pressures as “stubborn” and “sticky.” Speaking on the eve of the central bank’s annual economic symposium, Schmid indicated that policymakers continue to face significant challenges in achieving the Federal Reserve’s mandated 2% inflation target.
Schmid suggested that current interest rate policy remains accommodative rather than restrictive, implying that further monetary tightening may be necessary to bring inflation under control. The Kansas City Fed President’s remarks came as investors sought clarity on the policy direction under new Federal Reserve Chair Kevin Warsh.
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The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures index, stood at 3.7% last month, unchanged from June and slightly above market estimates. The higher-than-expected reading pushed bond yields higher, with the yield on rate-sensitive two-year notes climbing one basis point to 4.22%. Money markets have fully priced in a rate increase by December, reflecting expectations of further policy tightening.
The stronger-than-anticipated economic growth, with the US economy expanding at a 1.5% pace in the April-June period according to revised estimates, has reinforced expectations of additional rate hikes. Investors await Federal Reserve Chair Kevin Warsh’s address on Friday for signals regarding the central bank’s approach to inflation and interest rates.
Pernod Ricard Reports 3.9% Sales Decline Amid US-China Demand Weakness
French spirits manufacturer Pernod Ricard reported a 3.9% year-on-year decline in full-year net sales, driven by weakened demand in the United States and Chinese markets. The company, which produces Absolut vodka, Jameson whiskey, and Kahlua, posted full-year net sales of €9.4 billion, falling slightly short of the consensus estimate compiled by LSEG.
The company attributed the sales decline to a negative currency impact and softer demand conditions in its key markets. Performance improved during the second half of the fiscal year, but gains were hampered by the US-Iran war in the fourth quarter, which disrupted operations and consumer sentiment.
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Pernod Ricard now expects organic net sales growth to fall at the lower end of its 3% to 6% guidance range for the period between 2027 and 2029. The company cited ongoing softness in the American market as a primary constraint on growth, while also noting that the Middle East conflict is expected to weigh on sales in the first quarter of the new fiscal year.
Dollar General Surges 12% on Increased Profit Guidance and Share Buyback Plan
Discount retailer Dollar General emerged as a significant gainer, jumping 12% after raising its full-year earnings guidance and announcing an intention to repurchase shares under its existing buyback programme. The company now expects profit between $7.80 and $8 per share, up from the previous range of $7.20 to $7.45 per share.
The upward revision reflects improved operating performance and increased confidence in the company’s strategic direction. Dollar General also confirmed its intention to repurchase shares in the second half of the fiscal year ending January 29, 2027, signalling management’s assessment that current market valuations present an attractive opportunity for capital deployment.
The positive news from Dollar General contrasted with weakness in other consumer-related stocks, with Walmart declining 1.22% and Costco falling 1.02% in early trading. The divergence in performance highlights the varying fortunes among different segments of the retail sector.
HP Shares Drop 11% Despite Earnings Beat as Investors Focus on Outlook
HP shares declined nearly 11% in early trading despite the PC maker reporting fiscal third-quarter results that exceeded Street expectations. The company’s full-year earnings guidance also came in above analyst projections, yet investor reaction remained negative.
The sell-off in HP shares suggests that market participants had priced in expectations of even stronger performance, with the company’s guidance potentially falling short of the most optimistic forecasts. The reaction reflects the challenge technology companies face in meeting elevated investor expectations in a competitive hardware market.
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The decline in HP shares contrasted with gains across the broader technology sector, particularly in software and semiconductor stocks. The divergence underscores the uneven nature of the current tech rally, with AI-focused companies capturing the bulk of investor enthusiasm while traditional hardware manufacturers face headwinds from weaker PC demand.
Oil Prices Rebound as Iran-Oman Reach Temporary Shipping Agreement
Crude oil prices recovered in Thursday trading following a three-day decline, as hopes emerged that supply disruptions in the Strait of Hormuz could gradually ease. Benchmark US crude recovered modestly by $0.17 to $82.46 per barrel, while Brent crude gained $0.48 to $87.40 a barrel.
The price recovery followed reports that Iran and Oman have reached a potential agreement on managing ship traffic through the strategically vital waterway. The temporary arrangement would exclude military vessels from traversing the Strait of Hormuz, potentially reducing the risk of disruption to commercial shipping.
Iranian Deputy Foreign Minister Kazem Gharibabadi indicated that commercial shipping traffic entering the Persian Gulf would pass through Iranian waters, while the outbound route would pass partly through Iranian waters and partly through Oman’s waters. The routes would be temporary, with Iran and Oman required to discuss a permanent maritime traffic plan within 30 to 60 days.
The agreement came a day after the United States threatened to impose secondary sanctions on entities keeping Iran’s economy afloat. White House press secretary Karoline Leavitt confirmed that the United States and Iran are not currently in talks to end the war, with Washington focused on economic pressure while keeping all options on the table.
White House Considers Semiconductor Tariffs as Trade Policy Expands
The Trump administration is considering a fresh round of tariffs targeting the semiconductor sector and related goods, according to a Politico report citing eight anonymous sources. The proposed approach would dramatically expand the number of items subject to import duties, potentially bringing goods made with semiconductors such as laptops, data centre servers, and gaming consoles into the framework.
The potential expansion of semiconductor tariffs represents a significant escalation in trade policy, with implications for the global technology supply chain. The administration’s consideration of such measures reflects ongoing concerns about the concentration of semiconductor manufacturing capacity in Asia and the desire to incentivise domestic production.
The report added another layer of uncertainty for semiconductor stocks, which had already been volatile amid shifting trade policies and supply chain concerns. However, the sector’s strong gains on Thursday suggested that investors viewed the Nvidia-driven AI rally as a more significant factor than potential trade restrictions.
Jackson Hole Symposium Begins as Markets Await Warsh’s Monetary Policy Signals
The Federal Reserve’s annual Jackson Hole Economic Symposium commenced Thursday, with investors focusing on Chair Kevin Warsh’s upcoming address as the key event of the gathering. The symposium, hosted by the Kansas City Fed in Jackson Hole, Wyoming, provides a platform for central bank officials to discuss monetary policy and economic developments.
Warsh faces pressure to clarify his views on inflation and interest rates, having brought a sharp change in how the central bank communicates by saying much less than his predecessors about the economy. Economists and Wall Street investors have expressed mixed reactions to this approach, with some hoping for greater transparency about the policy outlook.
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The symposium takes place against a backdrop of persistent inflationary pressures, with the Fed’s preferred inflation measure remaining above target. Investors are particularly focused on the thresholds and economic data that could influence the central bank’s policy stance, given the likelihood of further rate increases.
Treasury yields stabilised after spiking last week as investors weighed the potential for government intervention in the bond market and the likelihood of the Fed holding rates steady. The 10-year Treasury yield was 2 basis points lower in early trading, while yields on two-year and 30-year securities also eased modestly.
The Nasdaq’s 0.84% advance, led by Nvidia’s 7.4% surge, demonstrates the continued influence of AI-related earnings on technology sector performance. Investors should monitor Federal Reserve Chair Kevin Warsh’s Jackson Hole address for signals on monetary policy direction, while jobless claims at 203,000 indicate labour market stability. Semiconductor stocks showed broad-based gains, though potential tariff expansions on chips warrant attention. Oil prices recovered to $87.40 per barrel amid shipping agreement hopes, while consumer retail performance diverged with Dollar General rising 12% and HP declining 11% despite earnings beats.
Source
- spglobal.com/spdji/en/indices/equity/sp-500/
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