o Barron’s recently assessed that the US stock market has shown relative resilience, digesting two key events: Nvidia's strong earnings and Federal Reserve Chair Kevin Warsh's speech at Jackson Hole.
o Barron’s listed the following reasons why the stock market hasn't experienced significant volatility:
- The S&P 500 has risen approximately 22% over the past five months, yet has essentially traded sideways for the last three weeks.
- Second-quarter earnings growth for S&P 500 companies was robust, around "52%".
- The strong growth potential of AI-related companies and resilient consumer spending are somewhat offsetting the burden of rising interest rates.
o In essence, while interest rates are likely to rise, corporate earnings are considered strong enough to absorb the impact.
It appears that the US stock market will be a battleground of "interest rates vs. AI profits" for the foreseeable future.
However, Nvidia's 4.58% decline (considering a reaction to the previous day's 8.74% gain) following Warsh's announcement suggests that interest rate influence may be slightly stronger at present. ㄷㄷㄷ
▶ Source: https://www.barrons.com/articles/stock-market-nvidia-fed-warsh-3ac03bf9
