TL;DR

Nvidia earnings loom; Fed signals possible cuts; Kohl’s surges on earnings; oil and yields slide.

Highlights

• Nvidia to report Q2 earnings post-close; options market pricing in a ~$270B swing, with results expected to influence S&P 500 direction 57.
• Cambricon, a major Chinese AI chipmaker, posted a 4,348% YoY sales jump, underscoring global AI chip competition 7.
• Fed’s Williams signals rate cuts could be appropriate as US growth slows to 1–1.5%, but policy remains restrictive 2.
• US 2-year Treasury yield fell to 3.65%, lowest since May; curve steepened as traders anticipate Fed easing 3.
• French 30-year OAT yield hit a 14-year high, widening spreads over Bunds and signaling European fiscal concerns 11.
• FDA narrows Covid vaccine eligibility to high-risk groups, ending broad public access; vaccine makers’ shares initially rose, then retreated 1.
• Oil prices fell over 2% despite inventory draws, as Goldman Sachs forecasts Brent could drop to low $50s by 2026 12.
• Kohl’s shares surged up to 27% on strong earnings and improved 2025 margin outlook, triggering a short squeeze 13.
• PayPal shares fell ~2% after a €10B payment disruption at German banks due to a security glitch 8.
• CFTC deployed Nasdaq’s surveillance platform to monitor crypto and derivatives, anticipating broader oversight 10.
• Newmont considering thousands of layoffs to cut costs after Newcrest acquisition, despite strong gold prices and YTD share rally 19.
• US Treasury Secretary Bessent ruled out a government equity stake in Nvidia and confirmed Fed chair interviews will start after Labor Day 64.

Commentary

US equity markets are largely in wait-and-see mode ahead of Nvidia ’s quarterly results, which are expected to set the tone for the S&P 500 and tech sector given Nvidia’s 8% index weighting and the options market’s implied $270B move 57. The report is particularly significant as Cambricon’s outsized growth in China highlights intensifying global competition in AI chips, a key driver of recent tech valuations 7.

On the macro front, Fed’s John Williams signaled that while policy remains restrictive, slowing US growth may open the door for rate cuts 2. This dovish tilt contributed to the US 2-year yield falling to a three-month low and a steeper yield curve, as traders increasingly price in Fed easing 3. However, persistent inflation expectations and tariff impacts keep the policy outlook data-dependent 2. In Europe, French OAT yields hit multi-year highs and spreads over Bunds widened further, reflecting fiscal concerns and adding to global rate volatility 11.

Commodities saw renewed pressure, with oil dropping over 2% after Goldman Sachs projected a long-term Brent surplus and lower prices, despite inventory draws 12. Gold remains elevated, but Newmont ’s cost-cutting plans following the Newcrest deal underscore margin challenges even in a strong price environment 19.

In corporate news, Kohl’s delivered a notable earnings beat and improved margin outlook, leading to a sharp short squeeze 13. Meanwhile, PayPal shares slipped after a major payment disruption in Germany, raising concerns about operational risk 8. Regulatory developments continue, with the CFTC rolling out Nasdaq’s surveillance tools to monitor crypto and derivatives markets, signaling a more robust compliance framework ahead 10.

Traders should closely monitor Nvidia ’s earnings and guidance for market direction, keep an eye on Treasury yield movements for rate expectations, and watch for volatility in heavily shorted or earnings-driven names.