Nvidia Delivers, The Fed Complicates Everything | Week Ending 29 August 2026

This week delivered two unmissable catalysts, and they pulled in opposite directions.

Nvidia reported a quarterly revenue print that would have looked fictional three years ago. Federal Reserve Chair Kevin Warsh used his first Jackson Hole address to make clear that a pivot is not the base case. Markets spent Thursday cheering, and Friday reconsidering.

Here’s what moved the needle.

NVDA: $96.2 Billion in a Single Quarter

On Wednesday after the close, Nvidia reported revenue for the second quarter of fiscal 2027 (the three months ended 26 July 2026) of $96.2 billion — up 106% year on year and 18% quarter on quarter. Analysts had been braced for a big number. They still got surprised.

For context: Nvidia’s entire fiscal 2023 annual revenue was $27.0 billion. The company now generates more than three times that in a single quarter.

The mix behind the print mattered as much as the headline. Data centre revenue was $89.0 billion, up 117% year on year. Gross margin held at 75.0%. CEO Jensen Huang put the cycle in blunt terms: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.” He added that the AI infrastructure buildout is “at full steam.”

The forward numbers are what actually moved the tape. Nvidia guided third-quarter revenue to $108 billion, plus or minus 2%, and that guide assumes no data centre compute revenue from China. CFO Colette Kress then pointed further out: the company expects about 70% revenue growth in fiscal 2028. Huang was explicit that unconstrained demand sits above that figure. Supply — wafers, advanced packaging, HBM memory — is the cap. Long-term supply commitments rose to $279 billion.

Chip stocks surged Thursday. Nvidia closed up close to 9%. The Nasdaq Composite gained about 1.6%. The S&P 500 rose about 0.7%, pulled higher by the information technology sector even as most other sectors finished red. It felt, briefly, like nothing could derail the trade.

Then Friday arrived.

Warsh Puts Rate Hikes Back in the Conversation

Federal Reserve Chair Kevin Warsh delivered his inaugural Jackson Hole keynote on Friday, 28 August. The market had hoped for a pivot signal. It did not get one.

July PCE, released Wednesday the same morning as Nvidia’s print, gave him the raw material. Headline PCE inflation was 3.7% year on year. Core PCE was 3.3%. Both were unchanged from June. Month on month, both rose 0.2%. That is not a collapse in the trend.

Warsh recommitted to a “firm, fixed” 2% PCE target and said summer readings, while better than some expected, “do not tell me that underlying trends have meaningfully improved.” The line that priced the afternoon:

“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”

Read plainly: rate cuts are off the table for now, and rate hikes cannot be ruled out. Futures markets lifted the odds of a September hike from around 40% toward 50–60%.

The S&P 500 fell 0.25% Friday, to 7,711.76. Treasury yields ticked up. The Nasdaq, which had surged on Nvidia the day prior, gave back about 0.5%. The week still ended green for the S&P 500 — up roughly 0.5% — but the Warsh speech introduced a variable markets will be pricing through September and into Q4.

The question is no longer whether the Fed pivots. It is whether the Fed tightens from here.

What It Means for the AI Trade

The Nvidia-Warsh combination creates a tension that Australian investors should sit with.

The demand case for AI just received another quarter of hard evidence. Real money is being deployed into real infrastructure at a rate that, on Nvidia’s own telling, is still running ahead of supply. Companies such as TSMC, Broadcom and AMD are direct beneficiaries, and their order books reflect it.

The macro case is murkier. Higher-for-longer rates — and now an open conversation about hikes — raise the discount rate on long-duration growth stocks. Nvidia’s earnings are current and enormous. The stock is still priced as a long-duration asset. That is a headwind for the most AI-concentrated names in the market: not a ceiling, but a weight.

The divergence between earnings quality and rate sensitivity is the defining tension of this market. Holding the AI story without the rate risk, or the rate risk without the earnings, is only half the brief.

Everything Else This Week

Oil. WTI slipped into the low US$80s. Brent held near US$89. Global crude extended a weekly decline as demand signals softened. Helpful for consumers; broadly neutral for equity indexes.

Canada tariffs. Canada announced retaliatory duties this week on about US$20 billion of American goods — steel, aluminium, dairy, appliances, electronics and more — matching Washington dollar-for-dollar after talks collapsed. The measures take effect 8 September. Direct market impact was contained. Secondary effects — trade rerouting, supply-chain cost adjustments — are still being absorbed.

The Aussie Lens

Two things matter specifically for Australian investors this week.

First, the AUD/USD. A hawkish Fed is typically dollar-supportive. The pair slipped from about 0.720 on Thursday to about 0.716 on Friday. Treat the FX line as part of total return, not a footnote.

If you already hold unhedged US equities, a stronger USD (weaker AUD) increases the Australian-dollar value of those USD gains when you repatriate. If you are converting AUD to buy in now, the same move raises your effective local-currency entry price. Track the rate at entry and at exit. It is part of the return equation, not an afterthought.

Second, the Nvidia result is a direct read-through to the entire AI chip supply chain — including names Australians can access through existing US brokerage accounts. The picks-and-shovels story is very much alive. Guidance, supply constraints and the second-order names are Monday.

Data Sources:

• NVIDIA, “NVIDIA Announces Financial Results for Second Quarter Fiscal 2027,” 26 August 2026; NVIDIA Form 10-Q for the quarter ended 26 July 2026
• U.S. Bureau of Economic Analysis, Personal Income and Outlays, July 2026, released 26 August 2026
• Federal Reserve Chair Kevin Warsh, Jackson Hole Economic Policy Symposium keynote, 28 August 2026
• S&P 500, Nasdaq Composite and Dow Jones Industrial Average official closes, 27 and 28 August 2026
• WTI and Brent crude futures settlements, week ended 28 August 2026
• Government of Canada / Department of Finance, retaliatory tariff announcement, 25–26 August 2026
• U.S. Treasury remarks on Iran sanctions package (“economic D-Day”), 24–25 August 2026

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