Nvidia's $442B Surge Meets Hawkish Warsh

Nvidia added $442B in market cap, the second-largest single-day jump ever, as Fed Chair Warsh.

Nvidia's market capitalization on the Nasdaq surged by $442 billion in a single day, marking the second-largest one-day increase in history for a single stock, according to The Asia Business Daily. The gain was driven by an 8.74% jump in its stock price after its second-quarter earnings and outlook far surpassed market expectations. Investor's Business Daily reports that Nvidia (NVDA) surged on booming earnings and blowout guidance, reinforcing its dominance as the S&P 500's market value champion.

According to The Asia Business Daily, Nvidia announced second-quarter revenue of $96.22 billion, up 106% year-on-year, beating the market consensus of $92.17 billion by roughly $4 billion. Earnings per share came in at $2.22, also exceeding estimates. The company projected that revenue for fiscal 2028 would increase by about 70%, far above the market expectation of approximately 45%. CEO Jensen Huang emphasized that demand is much higher than 70%, suggesting actual demand growth is close to 100% if supply had been sufficient.

Federal Reserve Chairman Kevin Warsh delivered his much-anticipated Jackson Hole speech, leaning hawkish and stressing his commitment to reducing inflation, according to Investor's Business Daily and The Motley Fool. While Warsh did not directly say the Fed would raise rates, The Motley Fool reports his clear message gave traders reassurance that he would act if inflation remains sticky. Former Boston Fed President Eric Rosengren told CNBC that the market is right in interpreting Warsh's speech as hawkish. The Motley Fool notes economists now see an almost 60% chance of a rate hike in September.

As of midday August 28, the S&P 500 was up 0.20% to 7,747, the Nasdaq Composite gained 0.14% to 26,561, and the Dow Jones Industrial Average climbed 0.17% to 53,658, according to The Motley Fool. Investor's Business Daily reports the major indexes saw solid gains, rebounding off their 21-day moving averages, though small caps fell slightly toward their 50-day line. The Motley Fool notes communication services stocks led sector gains while industrials and healthcare traded lower, with gold prices slipping 1.63% to $4,535.27 and the 10-Year Treasury yield up to 4.70%.

Despite Nvidia's historic surge, the broader semiconductor space came under pressure. The Motley Fool reports shares of Marvell Technology sank more than 9% and Rubrik fell 11% at midday, even though both firms beat analyst expectations. The Motley Fool suggests this could be because both stocks had seen huge rallies, making investors cautious, and higher interest rates tend to reduce appetite for riskier investments. Investor's Business Daily notes that many chip and AI hardware plays struggled even as Nvidia led the market higher.

The convergence of Nvidia's blowout results and Warsh's hawkish posture sets up a tension between AI-driven equity enthusiasm and tightening monetary policy. The Motley Fool reports economists now see a nearly 60% chance of a September rate hike. The Asia Business Daily notes Wall Street analysts, including JPMorgan, said Nvidia's outlook remains conservative given supply constraints, with real demand growth potentially much faster. However, concerns persist about Nvidia's expanding role in financing AI companies, which The Asia Business Daily reports could become a vulnerability if AI demand slows.