Financial News Today: Inflation Runs Hot, Nvidia Earnings Surge and Wall Street Slips

U.S. stocks finished narrowly lower on August 26, 2026, as investors weighed persistent inflation, slower economic growth and another blockbuster earnings report from Nvidia.

NEW YORK — Wall Street closed slightly lower Wednesday as a hotter-than-expected inflation report complicated the Federal Reserve’s interest-rate outlook, while Nvidia delivered quarterly results that reinforced the enormous scale of the artificial-intelligence investment boom.

The day’s financial news presented investors with two competing narratives. The U.S. economy continues to expand, corporate earnings remain resilient and AI spending is accelerating. At the same time, inflation remains well above the Federal Reserve’s target, economic growth has slowed and rising bond yields are placing additional pressure on stocks, businesses and consumers.

Wall Street slips after inflation report

The three major U.S. stock indexes finished the regular session modestly lower:

• Dow Jones Industrial Average: Down 113.52 points, or 0.21%, to 53,463.88
• S&P 500: Down 1.58 points, or 0.02%, to 7,675.70
• Nasdaq Composite: Down 21.10 points, or 0.08%, to 26,130.20

Trading remained subdued as investors waited for Nvidia’s results after the closing bell. The chipmaker’s enormous market value and central role in AI infrastructure have made its quarterly reports important events for the entire stock market.

Nvidia shares fell 1.6% during regular trading, contributing to weakness in the technology sector. Apple and Meta Platforms each gained more than 1%, helping limit the broader market’s losses.

Market breadth was weaker than the major indexes suggested, with declining stocks outnumbering advancing issues on both the New York Stock Exchange and Nasdaq. Trading volume also remained below its recent average. Reuters

Inflation remains above the Federal Reserve’s target

The Personal Consumption Expenditures price index increased 3.7% over the 12 months through July, slightly above the 3.6% rate economists had expected.

The PCE index matters because the Federal Reserve uses it as its preferred measure of inflation. The latest reading remained far above the central bank’s long-term 2% target, increasing uncertainty about when—and whether—policymakers will raise interest rates again.

Personal income rose 0.4% in July, while disposable personal income increased 0.5%. Consumer spending advanced just 0.2%, pointing to a more cautious household sector. The personal saving rate stood at 3%, according to the U.S. Bureau of Economic Analysis.

The report suggests that Americans earned more during the month but did not immediately translate all of those gains into additional spending. That could help ease some demand-driven inflation, but it may also signal that consumers are becoming more careful as prices and borrowing costs remain elevated.

Investors will now turn their attention to Federal Reserve Chair Kevin Warsh’s scheduled speech at Jackson Hole on Friday. His comments could provide new clues about how policymakers view inflation, economic growth and the path of interest rates.

U.S. economic growth slows to 1.5%

The Bureau of Economic Analysis also confirmed that real gross domestic product grew at an annualized rate of 1.5% during the second quarter. That represented a slowdown from 2.1% growth in the first quarter.

Consumer spending, exports and private investment contributed to the expansion. Lower government spending partly offset those gains, while rising imports also weighed on the GDP calculation.

The figures do not point to a recession, but they depict an economy that has lost some momentum. The combination of slower growth and persistent inflation creates a difficult environment for the Federal Reserve because tighter monetary policy could restrain the economy further, while easier policy could allow inflation to remain entrenched.

Nvidia revenue tops $96 billion as AI demand accelerates

Nvidia delivered the day’s biggest corporate report after the market closed.

The semiconductor company generated fiscal second-quarter revenue of $96.22 billion, up 106% from a year earlier and above Wall Street’s average estimate of approximately $92.17 billion. Adjusted earnings reached $2.22 per share, topping the $2.10 analysts expected.

Data-center revenue climbed 117% to $89 billion, demonstrating that cloud providers and technology companies continue to spend heavily on the computing power required to develop and operate artificial-intelligence systems.

Nvidia projected approximately $108 billion in third-quarter revenue, plus or minus 2%. Analysts had expected about $104.19 billion. The stronger outlook helped Nvidia shares rise more than 4% in extended trading after an initially mixed reaction.

The company also announced that Nvidia and Amazon Web Services plan to deploy an additional 2 million Nvidia graphics processors during 2027 and 2028. Nvidia expects its overall revenue to grow approximately 70% in fiscal 2028. Nvidia Investor Relations, Reuters

The report provided fresh evidence that the AI infrastructure boom remains intact. Microsoft, Meta and other major technology companies are expected to help push industrywide AI infrastructure spending above $730 billion this year, according to estimates cited by Reuters.

Risks remain, however. Nvidia forecast a third-quarter adjusted gross margin of approximately 74%, slightly below analysts’ expectations. Higher memory prices, the production ramp for its Rubin processors and growing competition from custom chips could pressure profitability.

Nvidia also excluded Chinese data-center chip sales from its latest outlook because export restrictions and regulatory uncertainty continue to complicate the company’s business in China.

Treasury yields rise as rate expectations shift

Bond yields moved higher following the inflation report. The benchmark 10-year Treasury yield reached approximately 4.65%, reflecting expectations that interest rates could remain elevated.

Higher Treasury yields can weigh on stock valuations, particularly for technology and other growth companies whose projected earnings stretch far into the future. They also influence mortgage rates, auto loans, corporate borrowing expenses and federal debt-service costs.

Futures markets placed the probability of a September Federal Reserve rate increase at approximately 38% following the inflation report. That remained well short of a firm market consensus but represented enough uncertainty to keep investors cautious.

Oil prices fall for a third consecutive session

Crude-oil prices declined as traders considered signs of reduced Middle East supply risk and a possible reopening of the Strait of Hormuz.

West Texas Intermediate crude settled 0.2% lower at $82.23 per barrel, while Brent crude fell 0.8% to $87.84. Both benchmarks experienced larger losses earlier in the session before recovering part of the decline.

U.S. commercial crude inventories increased by 95,000 barrels, marking their fourth consecutive weekly gain. Rising inventories can signal that supply is beginning to outpace demand.

Oil traders have also reduced some positions established during earlier fears of a major supply interruption. New U.S. sanctions against Iran proved less severe than some investors had anticipated, while diplomatic activity reduced expectations of an immediate escalation. The Wall Street Journal

Although Wednesday’s decline could offer some relief to consumers and transportation companies, crude prices remain vulnerable to rapid changes in Middle East diplomacy and shipping conditions.

Gold retreats while Bitcoin trades near $79,000

Gold declined more than 1% as the inflation report pushed Treasury yields higher. Rising yields can reduce the appeal of gold because the metal does not provide interest income.

The decline followed a strong August rally fueled by concerns about government borrowing, long-term Treasury yields, inflation and the value of the U.S. dollar. Gold remained above $4,500 an ounce despite Wednesday’s pullback.

Bitcoin traded around $78,700 after posting substantial gains earlier in the month. The cryptocurrency has recently moved alongside gold as some investors seek assets they believe could benefit from concerns about government debt and currency depreciation.

Both assets remain volatile, however, and their recent gains do not eliminate the possibility of sharp reversals if bond yields, the dollar or investor risk appetite change.

Abercrombie and Smucker rise; Intuit and HP fall

Several companies recorded large stock moves after reporting earnings or issuing updated guidance.

Abercrombie & Fitch surged nearly 36% after its financial results exceeded expectations. The retailer’s performance offered another sign that consumers remain willing to spend at companies with strong brands and effective inventory management.

J.M. Smucker rose 4.3% after reporting a smaller sales decline than analysts expected.

Intuit fell 3.2% during regular trading after issuing an annual revenue forecast that disappointed investors. The guidance raised questions about the pace of growth at the financial-software company.

HP dropped approximately 10% in after-hours trading despite reporting better-than-expected revenue and adjusted earnings. Its PC shipments fell 16% during the quarter, overshadowing an 18% increase in revenue from the division.

HP reported total quarterly revenue of $15.7 billion, up 12.5% from a year earlier. AI-enabled computers and price increases supported revenue, but the shipment decline raised concerns about underlying demand. Reuters

European and Asian markets post mixed results

International markets produced a mixed but generally stable session. Japan’s Nikkei 225 and China’s Shanghai Composite advanced, while major European indexes moved unevenly.

European stocks have benefited from improving earnings expectations, but inflation, energy costs and possible European Central Bank rate increases remain significant risks. The STOXX Europe 600 currently trades at approximately 14.6 times expected 12-month earnings—a 26% discount to U.S. equities but a considerably narrower gap than in late 2024.

Money markets expect the European Central Bank to raise its deposit rate to 2.5% at its next meeting. Investors are also monitoring European natural-gas prices as geopolitical conflicts threaten energy supplies and manufacturing costs. Reuters

What today’s financial news means for investors

Wednesday’s developments reinforced the tension driving financial markets in 2026.

Corporate profits—especially in artificial intelligence—continue to support historically high stock valuations. Nvidia’s report showed that demand for advanced chips and data-center infrastructure remains exceptionally strong.

The economic picture looks less comfortable. Inflation remains stubborn, GDP growth has slowed and Treasury yields are high enough to pressure businesses, consumers and richly valued stocks.

The next major market catalyst will likely come from the Federal Reserve. Investors will closely analyze Warsh’s Jackson Hole remarks for any indication that officials are preparing to increase interest rates in September or keep policy unchanged while awaiting more economic data.

For now, Wall Street appears caught between confidence in corporate earnings and concern that persistent inflation will keep borrowing costs higher for longer.

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