S&P 500 Edges Lower Despite Favorable NVIDIA Results and Stable Core PCE

The S&P 500 edged lower despite favorable results from NVIDIA, which comfortably beat the market's expectations, while core PCE inflation held steady in July.

The cash session had closed nearly flat hours earlier, at 7,675.70 points, ahead of the quarterly report.

NVIDIA carries the single largest weight of any company in the S&P 500, making its quarterly report one of the most consequential single events for the index each year. That outsized influence explains why the benchmark spent Wednesday's session trading in a tight, hesitant range.

The index had climbed 0.32% on Tuesday to 7,677.28, its third straight winning session, as retreating Treasury yields broadly lifted technology shares.

That momentum stalled on Wednesday, with futures slipping modestly in the hours before the report as investors digested the morning's inflation data and positioned defensively ahead of the print.

The core personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge, rose 0.2% month over month and 3.3% year over year in July, exactly in line with economists' expectations. That reading gave the Fed no fresh reason to tighten policy, though it did little to resolve the broader uncertainty weighing on the index.

The headline figure ran a bit hotter. Total PCE climbed 0.2% monthly and 3.7% annually, both readings 0.1 percentage points above forecasts, leaving the rate-cut debate unresolved just as NVIDIA prepared to report.

The 30-year Treasury yield had touched levels not seen in nearly two decades the previous week, and two days of falling yields had helped technology stocks recover some lost ground. The inflation report alone was not enough to reverse that underlying pressure, leaving the S&P 500 vulnerable to any disappointment from the day's main event.

NVIDIA (NVDA) closed the regular session at $209.66, down 1.59% from the previous close, according to TradingView data. In after-hours trading, however, shares jumped to $218.72, up 4.32%, as the market digested a quarter that beat consensus by a wide margin.

NVIDIA reported revenue of $96.2 billion, well above the roughly $92 billion consensus, representing a 106% year-over-year increase. Earnings per share came in at $2.22, comfortably beating the $2.09 estimate and more than doubling the $1.05 posted a year earlier.

Gross margin stood at 75%, though the company guided for a slight dip to 74% next quarter. Hyperscaler revenue more than doubled to $48.7 billion, while the AI cloud, industrial, and enterprise segment added $40.3 billion, up 138%.

CEO Jensen Huang described demand as accelerating, saying AI has reached its inflection point and that compute now generates real revenue. Despite that optimistic tone, S&P 500 futures reflected some early hesitation, as investors weighed the report against the index's broader valuation concerns tied to its heavy concentration in AI-linked names.

That reaction is not entirely unusual. NVIDIA has spent several consecutive quarters in which, even after beating Wall Street's estimates, its shares have struggled to hold gains, as the market demands increasingly ambitious guidance to justify its valuation. The company has posted only modest gains so far in 2026, well below the pace of prior years.

Fed Chair Kevin Warsh's speech at Jackson Hole on Friday now looms as the next major catalyst for markets.