S&P 500 Extends Its Winning Streak As Markets Look To NVIDIA Earnings And Inflation Data

(MENAFN- ValueWalk) NVIDIA's second quarter earnings and PCE inflation data highlight the coming week for stocks.

Coming off the best week of the year the previous week, the S&P 500 extended its winning streak last week by posting solid gains.

The large cap benchmark rose 1.5% last week, one week after jumping 3.9%. At 5,634, the S&P 500 was nearing all-time closing high territory. The nasdaq Composite climbed 1.4% last week after surging 5.3% the week before. The Dow Jones Industrial Average gained 1.2% last week, and after climbing 135 points Monday morning to 41,311, it hit an all-time high.

Also, the Russell 2000 had another strong week, rising 3.9% last week to 2,219.

So far, this has been an above average August for the markets, as the S&P 500 has gained 2% this month through August 23, while the Nasdaq is up 1.6% and the Dow has risen 0.8%. Only the Russell 2000 is down this month, roughly 1.5%.

The markets will be looking to end the month on a high note this week as the hottest stock in the world, NVIDIA (NASDAQ:NVDA) posts second quarter earnings on Wednesday after the market closes.

The major catalyst that pushed the indexes into positive territory last week was Fed Chair Jerome Powell's speech at the annual Jackson Hole Economic Symposium.

At the summit, hosted by the Kansas City Fed, Powell all but confirmed that rate cuts are coming, stating that the“time has come for policy to adjust.” He stopped short of saying cuts will come at the September Federal Open Markets Committee (FOMC) meeting, but the odds are extremely high that they will.

The markets gained on the news last Friday, led by the Russell 2000, which rose 3.2% on the day. While September rate cuts have most been baked into the large cap indexes, the gains were modest. But small caps stocks, which stand to gain the most from rate cuts, soared on the good news out of Jackson Hole.

Earnings season is winding down, but that doesn't mean things will be quiet this week. NVIDIA, the second largest company in the world by market cap, reports second quarter earnings on Wednesday, August 28, after the market closes.

As NVIDIA reports earnings near the end of the cycle, it will be in the spotlight this week. And a good earnings report from NVIDIA can move markets.

This will be the first earnings report for NVIDIA after its 10-for-one stock split in June. Based on the projections of Wall Street analysts, it should be another big quarter for NVIDIA.

Analysts expect NVIDIA to report earnings of 57 cents per share, which would be more than double the 25 cents earnings per share from the same quarter a year ago, adjusted for the stock split. It would be up from 56 cents per share in Q1.

Revenue is projected to hit $25.6 billion, almost twice the $13.5 billion in revenue the AI chip maker made in the same quarter a year ago. However, the estimate falls slightly below the $26 billion record revenue NVIDIA generated in Q1.

NVIDIA stock is up 160% YTD to $127 per share and it is up 28% since early August when it dipped below $100 per share.

NVIDIA is not the only notable company to report earnings this week, as tech companies Salesforce (NYSE:CRM), CrowdStrike (NASDAQ:CRWD), HP (NYSE:HP), and Affirm (NASDAQ:AFRM) also report earnings Wednesday after market close.

There are several important retailers also on the schedule this week, including Kohl's (NYSE:KSS) and Abercrombie & Fitch (NYSE:ANF) on Wednesday; and Dollar General (NYSE:DG), American Eagle (NYSE:AEO), Birkenstock (NYSE:BIRK) and Best Buy (NYSE:BBY) on Thursday.

Also, on Thursday after the closing bell, Warren Buffett's newest stock, Ulta Beauty (NASDAQ:ULTA) reports earnings.

Last but certainly not least, the Fed's key inflation gauge, the Personal Consumption Expenditures (PCE) report comes out on Friday. In June, the inflation rate as measured by the PCE was 2.5%, dropping for the third consecutive month. Analysts expect it to remain at 2.5% in July.

A good PCE report would almost certainly support the Fed's case to lower interest rates in September.

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