Three events dominated the market trading in the week ending Aug. 28:
- Kevin Warsh's hawkish Jackson Hole debut.
- Nvidia's blowout earnings.
- A cybersecurity sector rally that produced multiple single-day records.
About those interest rates
Federal Reserve Chair Kevin Warsh used his first Jackson Hole keynote to deliver the most aggressive message the Fed has issued in months when it comes to raising interest rates, hitting three distinct pressure points:
On inflation, Warsh reaffirmed the 2% level as "a firm, fixed target" and said summer's better-than-expected prints, or completed transactions, "do not tell me that underlying trends have meaningfully improved."
Core Personal Consumption Expenditure (PCE) price index — the Fed’s favorite inflation gauge — is tracking at 3.7% over the past 12 months and 4.1% over the past six, both materially above mandate.
“There is one signal nobody can miss: The responsibility
for 65 months of sustained, elevated inflation sits squarely with the central bank,” he said.
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 interest rates from here.
On the labor market, Warsh flagged the 4.1% unemployment rate as consistent with full employment, removing the traditional dovish trigger for rate cuts.
Rates markets repriced immediately. Odds of a September Fed interest rate hike jumped to 57.5%, versus 39.9% one week ago and 24% one month ago, per CME FedWatch.
The 2-year Treasury yields pushed above 4.30%. The dollar rebounded.
Nvidia's best day since April 2025
Tech and semiconductor company Nvidia Corp. reported second-quarter fiscal year 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.
Nvidia guided for 70% revenue growth in fiscal-year 2028, smashing estimates of 40%.
Shares closed 8.74% higher on Thursday, the biggest single-session gain since April 2025.
More single-day records
The most violent sector move of the week came from cybersecurity and software names.
CrowdStrike Holdings surged 20.5% Thursday, the biggest single-day gain in the stock's history, on a record second-quarter print.
Salesforce delivered 80% earnings beat and above-expected guidance.
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.
Shares rallied over 20% for the week, topping the S&P 500 weekly leaderboard.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Fed chair delivers tough interest rate love as Nvidia shares soar
