Stock Market Weekly Recap: AI Roars Back, Fed Turns Hawkish — What to Watch Next Week

Week of Aug. 24–28, 2026 | Outlook for Aug. 31–Sept. 4

Wall Street ended the week higher, but getting there was anything but straightforward.

The S&P 500 gained 0.49%, the Nasdaq rose 0.85% and the Dow added 0.53% for the week.

Beneath those modest gains, investors spent five days moving between two competing forces:

Powerful AI earnings vs. the risk of higher interest rates.

By Thursday, $NVDA, $CRM and $CRWD had investors talking about another leg higher in the AI trade. By Friday, Fed Chair Kevin Warsh had reminded markets that inflation — and Treasury yields — could still disrupt that rally.

Here’s what actually mattered this week.

Monday: Tech Starts the Week Under Pressure

The week opened with investors reducing exposure to semiconductors ahead of $NVDA earnings.

The Nasdaq fell 0.76%, while the S&P 500 lost 0.28%.

$NVDA dropped 2.9%, $MU fell 5.8% and $AVGO lost 2.6%.

At the same time, financials held up much better, with $JPM gaining 1.4% and $V up 3%.

The bigger issue was the bond market.

The 30-year Treasury yield remained above 5% after recently reaching a 19-year high, keeping pressure on expensive growth stocks.

Monday's message: even before earnings, higher yields were already making investors more selective about technology valuations.

Tuesday: Falling Oil + Yields Give Tech Some Relief

Tuesday brought a reversal.

The Nasdaq gained 0.66%, the S&P 500 rose 0.32% and the Dow added 0.30% as Treasury yields eased and oil prices dropped sharply.

$NVDA recovered 2.2%, $MU gained 2.5% and $AMD jumped 4.9% after an analyst upgrade.

But some of the week’s biggest individual moves came outside AI.

$MRNA surged 14% following an analyst target increase after positive late-stage cancer-vaccine data with $MRK.

On the other side, $DKS collapsed 30.7% after Dick’s Sporting Goods cut its annual forecasts.

Meanwhile, U.S. consumer confidence fell to a seven-month low, another reminder that conditions beneath the headline stock indexes remain mixed.

Oil was also important. WTI fell more than 3% to roughly $82 as geopolitical risk eased.

Wednesday: Inflation Refuses to Go Away

Wednesday shifted attention back to the economy.

July PCE inflation rose 3.7% YoY, slightly above the 3.6% consensus estimate, while U.S. Q2 GDP came in at 1.5%.

Stocks barely moved — the S&P 500 lost just 0.02% — but the inflation report increased the importance of Fed Chair Kevin Warsh’s upcoming Jackson Hole speech.

At that point, markets were pricing roughly a 38% probability of a September rate hike.

There were still major winners.

$ANF surged more than 22% after Abercrombie raised its full-year outlook. Quarterly EPS came in at $4.17 versus roughly $1.99 expected, while revenue reached $1.27B.

But Wednesday’s real event came after the closing bell.

$NVDA reported earnings.

And it changed the tone of the entire market.

$NVDA: The AI Slowdown Still Isn’t Here

Nvidia reported another extraordinary quarter:

• Revenue: $96.2B, +106% YoY
• Data Center revenue: $89B, +117%
• Q3 revenue outlook: roughly $108B
• Next fiscal year revenue growth outlook: roughly 70%

The numbers directly challenged the idea that AI infrastructure spending is beginning to slow.

$NVDA exploded 8.7% Thursday.

The semiconductor index gained 2.3%, while the S&P 500 technology sector jumped around 3.4%.

But Nvidia wasn’t Thursday’s only story.

The Bigger Surprise: Software Became an AI Trade Again

For months, investors have debated whether generative AI would eventually destroy traditional software economics.

This week provided one of the strongest counterarguments yet.

$CRM +22.6%

Salesforce delivered revenue of $11.3B, up 11%, and raised its FY27 revenue outlook.

More importantly, Agentforce + Data 360 ARR reached nearly $3.9B, growing more than 210% YoY.

Agentforce ARR alone exceeded $1.5B, growing more than 240%.

Shares surged 22.6% Thursday.

$CRWD +20.5%

CrowdStrike called Q2 the best quarter in its history.

Revenue reached $1.47B, +26%, ARR reached $5.84B and record net-new ARR hit $333M.

The company also raised its full-year outlook, sending shares up 20.5%.

$OKTA also delivered a major post-earnings move after raising its outlook.

The emerging takeaway:

AI may not simply disrupt enterprise software. The strongest software companies may be able to monetize AI as an entirely new layer of demand.

That may become one of the market’s most important themes through the rest of 2026.

Friday: The Fed Takes Control Back

Then came Jackson Hole.

Fed Chair Kevin Warsh made clear that the Fed’s 2% PCE inflation objective remains a firm target.

He said underlying inflation must be moving toward that objective clearly and quickly enough — otherwise, the Fed still has work to do.

Markets increased bets on a September hike to roughly 57%–58%.

The Nasdaq fell 0.52%, the S&P 500 declined 0.25% and $NVDA dropped 4.6%, giving back part of Thursday’s massive earnings rally.

That price action may be the week’s most important clue.

Nvidia’s fundamentals didn’t deteriorate between Thursday and Friday. The discount rate changed.

That means yields could matter almost as much as earnings next week.

$MRVL Shows the Danger of Extreme Expectations

$MRVL delivered numbers that looked strong on paper:

• Record revenue: $2.739B
• Revenue growth: +37% YoY
• Data Center growth: +46%

Yet $MRVL fell 10.3% Friday.

Investors focused instead on how quickly its Google custom-AI-chip relationship would translate into material revenue.

This is important.

The AI trade has reached a point where strong growth isn’t necessarily enough.

Companies increasingly need to beat the expectations already embedded in their valuations.

Retail Had Huge Winners AND Losers

The consumer story was unusually divided this week.

$DKS plunged more than 30% after cutting forecasts.

$ANF surged more than 22% after raising its outlook.

And Friday brought another winner.

$GAP

Gap shares jumped roughly 13% after the company raised its EPS outlook and named Michael Francis as the next CEO of Old Navy.

One important distinction:

Overall Gap Inc. comparable sales fell 1%, but the Gap brand itself delivered +10% comparable sales.

Old Navy comparables declined 4%, while Athleta dropped 12%.

So $GAP isn’t simply a broad retail-strength story.

It’s increasingly a brand-turnaround story.

$PYPL: Takeover Premium Vanishes

$PYPL fell roughly 12% Friday after reports that a consortium involving Advent International and Stripe abandoned its takeover pursuit.

The reported proposal had valued PayPal around $53B, or $60.50 per share.

With the takeover catalyst now apparently gone, investors have to value $PYPL based again on the underlying turnaround.

That could make the stock interesting if Friday’s decline attracts fundamental buyers.

Oil Quietly Had a Big Week Too

One macro development received much less attention than Nvidia but could matter for inflation.

Oil prices fell sharply during the week as geopolitical fears eased.

By Friday, Brent was down roughly 5.3% for the week and WTI about 4.5%.

Lower oil prices are ultimately helpful for inflation.

But geopolitical risk remains high enough that energy could reverse quickly if conditions change.

So What Did We Learn This Week?

1. AI demand remains extremely strong

$NVDA’s numbers showed no obvious sign that hyperscaler AI spending is collapsing.

2. AI leadership may be broadening

$CRM, $CRWD and $OKTA suggest investors may increasingly look beyond chips toward software companies actually monetizing AI.

3. Rates are becoming the biggest threat to the rally

Strong corporate earnings are supporting valuations, but if inflation forces the Fed to tighten again, higher yields could pressure those same valuations.

That conflict sets up next week.

Next Week Market Outlook — Aug. 31 to Sept. 4

Next week could be even more important.

$NVDA proved that AI demand remains strong.

Now investors need to answer two different questions:

How strong is the economy?

and

Can $AVGO confirm Nvidia’s AI message?

Tuesday: JOLTS + $PANW + $DELL

July JOLTS job-openings data arrives Tuesday at 10:00 AM ET.

After Warsh’s speech, labor data now directly feeds into September Fed expectations.

The ISM Manufacturing PMI also arrives Tuesday.

$PANW

Palo Alto Networks reports fiscal Q4 results after the market closes.

After huge moves in $CRWD and $OKTA, this becomes another test of the AI + cybersecurity thesis.

$DELL

Dell Technologies also reports Tuesday.

Dell has become an important AI infrastructure read-through because of enterprise AI servers and its broader Nvidia-linked AI hardware business.

Wednesday: $AVGO Becomes the Main Event

Broadcom reports after Wednesday’s close.

This could be the week’s most important individual stock catalyst.

$AVGO sits at the intersection of:

• Custom AI accelerators
• Networking
• Hyperscaler spending
• AI infrastructure

After $NVDA’s extraordinary outlook, investors will want to know whether Broadcom sees the same acceleration.

A strong report could strengthen the argument that AI infrastructure demand is broadening.

A weaker outlook could create concern that expectations across semiconductor stocks have moved too far ahead of fundamentals.

Thursday: Services Economy Gets Tested

The ISM Services PMI arrives Thursday.

Services represent a much larger part of the U.S. economy than manufacturing, so investors will be watching both activity and inflation components closely.

Revised Q2 productivity and labor-cost data also arrive Thursday morning.

Any evidence of rising labor costs could matter more than usual after Warsh’s hawkish Jackson Hole message.

Friday: The Biggest Macro Catalyst — Jobs

The August employment report arrives Friday, Sept. 4 at 8:30 AM ET.

Current expectations are roughly:

• Payroll growth: +58,000
• Unemployment rate: 4.1%

July payrolls unexpectedly declined by 23,000.

That creates three possible market setups.

Scenario 1: Moderately Soft Jobs — Potentially Bullish

Employment remains positive but continues cooling.

That could reduce pressure on the Fed to hike while avoiding a major recession signal.

Potential reaction: yields ↓ → growth/AI stocks ↑

Scenario 2: Hot Jobs Report — Biggest Near-Term Risk

Strong payroll growth plus strong wages would reinforce the idea that the economy can withstand higher rates.

That could push September hike probabilities even higher.

Potential reaction: yields ↑ → high-multiple tech pressure

Scenario 3: Very Weak Employment — Mixed

A genuinely bad jobs report could reduce Fed hike expectations dramatically.

But if employment deteriorates too quickly, investors may begin worrying about economic growth instead.

Potential reaction: yields ↓, but cyclicals and consumer stocks could weaken.

BullsMeet Watchlist for Next Week

• $NVDA — Can it reclaim Thursday’s earnings momentum?
• $AVGO — The week’s biggest AI semiconductor catalyst.
• $PANW — Can cybersecurity continue the $CRWD/$OKTA breakout?
• $DELL — Another read on enterprise AI infrastructure demand.
• $CRM — Watch whether the massive earnings gap holds.
• $CRWD / $OKTA — Key tests for the new AI-software momentum trade.
• $MRVL — Does Friday’s 10% selloff attract buyers?
• $PYPL — Watch for stabilization after takeover expectations disappeared.
• $GAP / $ANF — Two major retail momentum names from this week’s earnings.

Bottom Line

This wasn’t simply an Nvidia earnings week.

It was a week that exposed the two forces currently fighting for control of the market.

On one side:

AI spending → accelerating revenue → huge corporate profits.

On the other:

Sticky inflation → potentially higher Fed rates → higher Treasury yields.

Corporate fundamentals are giving bulls plenty of ammunition.

But Friday showed that earnings aren’t operating in a vacuum.

For next week, BullsMeet investors should keep four things at the top of the screen:

Treasury yields → $AVGO → JOLTS/ISM → Friday’s jobs report.

If yields cool while AI earnings remain strong, the rally may have room to broaden.

If yields push higher again, even great earnings could face a much tougher market.

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This article is for informational purposes only and is not financial advice.