Stock Market Today: Dow off 150 points, S&P 500 flat and Nasdaq lower as bond yields rise; PCE inflation data ticks higher in July and investors await Nvidia earnings

 Stock Market Today: Dow off 150 points, S&P 500 flat and Nasdaq lower as bond yields rise; PCE inflation data ticks higher in July and investors await Nvidia earnings

## The Day the Market Held Its Breath

Wednesday, August 26, 2026, was one of those days that felt like the calm before a storm. The opening bell rang, and for the next six and a half hours, the stock market essentially went nowhere.

The Dow Jones Industrial Average found itself caught in a tug-of-war, swinging between modest gains and losses before settling lower by roughly 150 points at its session lows. The S&P 500 hugged the flatline, barely moving in either direction. The Nasdaq Composite dipped into the red as bond yields ticked higher. It was the kind of session that makes traders restless—all waiting, all watching, all holding their breath for what came next.

What were they waiting for? Two things. First, the July Personal Consumption Expenditures (PCE) price index—the Federal Reserve's preferred inflation gauge—had just been released. Second, and far more consequential, Nvidia was set to report its fiscal second-quarter earnings after the closing bell.

The data came in. The market shrugged. Then everyone turned their eyes to Silicon Valley.

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## The Numbers: What Actually Happened

### A Session Defined by Waiting

By the time the closing bell rang, the major averages had eked out modest gains—but only if you looked at the final print. The intraday story was one of hesitation.

The Dow Jones Industrial Average rose 160.24 points, or 0.3%, to close at 53,577.40, recording its third straight day of gains. The S&P 500 added 24.38 points, or 0.3%, finishing at 7,677.24. The tech-heavy Nasdaq Composite jumped 171.11 points, or 0.7%, to end at 26,151.30.

But those closing numbers mask the session's real character. The Dow had been off more than 150 points at its lows. The S&P 500 flirted with negative territory throughout the day. The Nasdaq was lower for much of the session as bond yields climbed and investors grew uneasy.

"The S&P 500 was relatively unchanged on Wednesday after the latest personal consumption expenditures price index reading revealed that inflation remains elevated," CNBC reported. "The broad market index traded around the flatline, as did the Nasdaq Composite. The Dow Jones Industrial Average was also flat."

Technology and communication services stocks were the biggest gainers, with the Information Technology Select Sector SPDR gaining 0.9% and the Communication Services Select Sector SPDR rising 0.8%. Six of the 11 S&P 500 sectors ended in positive territory.

The CBOE Volatility Index—Wall Street's fear gauge—was down 2.52% to 15.45, reflecting the market's oddly tranquil mood. Advancers outnumbered decliners on the NYSE by a 1.71-to-1 ratio, while on the Nasdaq, a 1.76-to-1 ratio favored advancing issues.

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## The PCE Report: Sticky Inflation, Stubborn Numbers

### The Fed's Preferred Gauge Comes In Hot

Wednesday morning brought the inflation data that markets had been bracing for. The Bureau of Economic Analysis reported that the personal consumption expenditures price index rose 0.2% in July from the prior month, leaving the annual rate at 3.7%.

Both figures came in 0.1 percentage point above expectations. Economists had been looking for a monthly increase of 0.1% and an annual rate of 3.6%.

Core PCE, which strips out volatile food and energy prices, rose 0.2% on the month and 3.3% on an annual basis—both matching forecasts. The annual core rate has now held at 3.3% in three of the past four months, producing almost no net improvement since April.

"This wasn't just any PCE report—it was the PCE report before Kevin Warsh's Jackson Hole keynote, which could make or break the resurrection of the debasement trade," said Nic Puckrin, macro analyst and founder of Coin Bureau. "And today's numbers should have investors worried."

The report's message was clear: inflation is cooling, but it's cooling slowly. Too slowly for the Federal Reserve's comfort.

### The Market's Muted Reaction

Despite the hot headline number, the market's response was surprisingly subdued. Treasury yields were little changed after the release. Stocks remained flat to lower.

Why didn't the market react more dramatically? Because the core PCE number—the one the Fed watches most closely—came in exactly as expected. The headline beat was driven by a rebound in prices after June's decline, which had been fueled by a drop in energy costs.

"The data still gives the Federal Reserve time to wait and see," said Heather Long, chief economist at Navy Federal Credit Union. "It's not getting worse, but it didn't get any better in July either."

### The FedWatch Calculus

According to the CME Group's FedWatch tool, fed funds futures are pricing in a 40% probability that the central bank will raise its overnight rate by a quarter percentage point in September—about in line with Tuesday's odds and well above the 33% chance seen a week ago.

For the Fed's December meeting, there is a 27.1% chance of rates being unchanged and a 45.4% chance of rates being increased to between 3.75% and 4%.

"The number of dissenters at the next meeting may grow because the month-over-month readings are getting worse," said Chris Zaccarelli, chief investment officer for Northlight Asset Management. "But we believe enough of the FOMC will want to wait to see more data before making a decision to raise rates next month."

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## The Bond Market: Yields Creep Higher

### The Yield Story

Treasury yields moved modestly higher on Wednesday, adding to the pressure on stocks. The 10-year Treasury yield rose to around 4.658%, while the 30-year yield climbed to roughly 5.19%.

The moves came after two days of declines. On Tuesday, bond yields had fallen for the second straight day, much to the relief of investors, as oil prices eased. The 10-year yield slid more than 7 basis points to settle at 4.625% on Tuesday.

But the relief was short-lived. With inflation remaining sticky and the Jackson Hole symposium looming, bond investors remained cautious.

### Bessent's Intervention

The bond market's attention remained fixed on Treasury Secretary Scott Bessent's decision to expand Treasury buybacks—a move that has drawn both praise and criticism.

On Monday, Bessent had warned countries to cut their financial ties with Iran or face secondary sanctions as part of what had been billed as "economic D-Day". The announcement came alongside the Treasury's plan to at least double its buybacks of long-term government debt, raising the maximum size of its repurchasing operation from $2 billion to $4 billion per operation.

The initial market reaction was positive. Yields tumbled. But the relief proved fleeting. By Wednesday, yields were creeping higher again as investors questioned whether the intervention would have a lasting impact.

"There's a lot of push and pull—in the bond market, geopolitics, oil," said Joe Quinlan, head of market strategy for Merrill and Bank of America Private Bank.

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## Nvidia: The Wait Is Almost Over

### The Most Anticipated Earnings Report of the Year

If the PCE report was the morning's main event, Nvidia's earnings were the main event of the entire week. The chipmaker was set to report its fiscal second-quarter results after the closing bell, and the stakes could hardly be higher.

Wall Street was looking for earnings per share of $2.09 on $92.28 billion in revenue, according to FactSet. That would represent a near-doubling of both metrics from the same quarter last year.

"Nvidia's results will be the next test for the earnings-driven rally," RTHK reported. "Any signs of slowing growth could reignite concerns about stretched valuations and how long the AI boom can sustain them."

### The "Beat-and-Raise" Expectation

The market is pricing in a beat for Nvidia, so Bank of America argued the real debate is around balance sheet disclosures related to purchase agreements.

"Quantifying these liabilities won't erase AI buildout risk, but it lets the market price properly into what we see as a depressed valuation," analysts wrote.

The company has beaten earnings estimates for 14 consecutive quarters. But the stock has fallen after each of the past four earnings releases. Investors have come to expect perfection—and even perfection may not be enough.

Ahead of the report, Nvidia shares had been trading around $213, up 2.2% on Tuesday but still significantly underperforming the broader semiconductor index. The stock was down about 1.26% in Wednesday trading to $210.40 ahead of the report.

### Why It Matters

Nvidia has become a proxy for the broader AI trade. Its results will offer new insight into whether the massive spending on AI infrastructure is sustainable or creating a speculative bubble.

"This is the classic problem of being the epicentre of the buildout—when you are the trade, execution stops being a catalyst and becomes a prerequisite," said Mark Malek, chief investment officer at Siebert Financial.

The report comes at a critical moment. Markets have grown wary of cyclical spending and the methods hyperscalers are using to fund their AI buildouts. If Nvidia signals any slowdown in demand, the ripple effects could be profound.

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## The Stocks That Moved

### The Winners

**Nvidia** rose 2.2% on Tuesday ahead of its report. **Micron Technology** gained 2.5%. **Advanced Micro Devices** surged 4.9% after Raymond James upgraded the stock.

**Meta Platforms** climbed nearly 2%. The company reached a $16.68 billion settlement with state attorneys general over a lawsuit alleging its social media apps harmed young users, and shares moved marginally higher on the news.

**Moderna** surged 14% after Barclays hiked its target price, coming days after the company and Merck reported late-stage trial results for their jointly developed skin cancer vaccine.

### The Losers

**Dick's Sporting Goods** plunged 30.7% after the retailer cut its annual forecasts.

**Target** shares fell 3.8% after the retailer apologized for and pulled a Halloween costume criticized for evoking blackface, renewing concerns about brand missteps just as its financial turnaround effort had begun to gain traction.

**Intuit** was down 10% in premarket trading after disappointing fiscal 2027 guidance, particularly for TurboTax, which is squandering share to cheaper AI-based alternatives.

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## The Week Ahead: Jackson Hole and the Fed

### Warsh's Defining Moment

Friday's Jackson Hole symposium looms over everything. Federal Reserve Chair Kevin Warsh is scheduled to deliver his first keynote address at the annual gathering since taking office in May.

The speech comes at a critical moment. Inflation remains stubbornly above target. The bond market is on edge. And the Treasury Department's intervention has created tension between fiscal and monetary policy.

"Today's mild upside inflation surprise and relative economic strength weren't necessarily what investors—or the Fed—wanted to see," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "It wasn't enough to shift the balance for September's FOMC meeting."

### What to Watch For

Investors are looking for Warsh to clarify the Fed's reaction function—how it will respond to different data outcomes. If he leans hawkish, it could derail the gold and Bitcoin rally and put further pressure on the AI trade. If he provides clear guidance, markets could stabilize.

But some analysts expect Warsh to remain tight-lipped ahead of the September Fed meeting. "Given his approach to the June and July press conferences, we think it is unlikely that he would move straight to a deep dive into the current economic outlook," wrote Piper Sandler's head of central bank policy Kurt Lewis.

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## Frequently Asked Questions (FAQs)

### 1. How did the stock market perform on August 26, 2026?

The Dow Jones Industrial Average rose 160.24 points (0.3%) to close at 53,577.40. The S&P 500 added 24.38 points (0.3%) to 7,677.24. The Nasdaq Composite jumped 171.11 points (0.7%) to 26,151.30. However, the Dow was off more than 150 points at its session lows, and stocks spent much of the day near the flatline.

### 2. What did the July PCE inflation report show?

Headline PCE rose 0.2% monthly and 3.7% annually, both 0.1 percentage point above expectations. Core PCE, which excludes food and energy, rose 0.2% monthly and 3.3% annually, matching forecasts.

### 3. Why didn't the market react more strongly to the PCE report?

The core PCE number came in exactly as expected, which meant the report didn't significantly shift expectations for the September Fed meeting. The headline beat was driven by volatile energy prices rather than broadening inflation pressures.

### 4. What are the odds of a September rate hike?

CME FedWatch data shows a 40% probability of a September rate hike, about in line with Tuesday's odds and well above the 33% chance seen a week ago. For December, there is a 45.4% chance of rates being increased to between 3.75% and 4%.

### 5. What are analysts expecting from Nvidia's earnings?

Analysts expect earnings per share of $2.09 on $92.28 billion in revenue for Nvidia's fiscal second quarter, according to FactSet. The report is seen as a bellwether for the broader AI trade.

### 6. How did Nvidia stock perform ahead of the report?

Nvidia shares rose 2.2% on Tuesday but were down about 1.26% in Wednesday trading to $210.40 ahead of the report. The stock has significantly underperformed the broader semiconductor index this year.

### 7. What is the Jackson Hole symposium?

The Jackson Hole Economic Policy Symposium is the Federal Reserve's annual gathering of central bankers and economists. Fed Chair Kevin Warsh is scheduled to deliver a keynote speech on Friday, which markets are watching for clues about the Fed's policy path.

### 8. What should investors watch for in Warsh's speech?

Investors are looking for clarity on how the Fed plans to respond to stubborn inflation. If Warsh leans hawkish, it could put further pressure on the AI trade. If he provides clear guidance, markets could stabilize.

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## Conclusion: The Calm Before the Storm

Wednesday, August 26, 2026, was a day of waiting. The PCE report came and went, delivering a mixed message: inflation remains stubbornly high, but core inflation is at least stable. The bond market crept higher, adding pressure to stocks. And investors spent the day positioning themselves for the main event: Nvidia's earnings.

The chipmaker's results will shape the AI narrative for months to come. A beat could fuel the next leg of the rally. A miss—or even a meet that fails to raise guidance—could trigger a selloff in the most crowded trade in the market.

And looming over everything is Jackson Hole. Fed Chair Kevin Warsh's speech on Friday will determine whether the bond market stabilizes or sells off further. His words will shape expectations for the September Fed meeting and beyond.

"With markets continuing to be sensitive to any data that could increase the odds of rate hikes, today's mild upside inflation surprise and relative economic strength weren't necessarily what investors—or the Fed—wanted to see," said Ellen Zentner.

The Dow ended the day higher, but it was off more than 150 points at its lows. The S&P 500 was flat. The Nasdaq was lower. The market was holding its breath, waiting for answers that won't come until after the close.

The calm before the storm is over. The storm is about to begin.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. All views expressed are based on publicly available information as of August 26, 2026. Market conditions, economic data, and Federal Reserve policy are subject to rapid change. The author does not endorse any specific investment strategies or products. Past performance is not indicative of future results. Before making any financial or investment decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation.*