U.S. stocks ended narrowly lower on Wednesday, August 26, as slightly hotter-than-expected inflation data lifted Treasury yields and investors waited for Nvidia's quarterly results after the closing bell. The major indexes moved only modestly and remained near their recent highs.
Market at a Glance
| Index | Close | Daily change |
|---|---|---|
| S&P 500 | 7,675.70 | -1.58 (less than -0.1%) |
| Nasdaq Composite | 26,130.20 | -21.10 (-0.1%) |
| Dow Jones Industrial Average | 53,463.88 | -113.52 (-0.2%) |
| Russell 2000 | 3,005.90 | -4.12 (-0.1%) |
The restrained declines across all four benchmarks point to a holding pattern rather than broad risk aversion. Investors had two significant reasons to avoid large positions: an inflation report that complicated the interest-rate outlook and results due from the market's largest company after the close.
Inflation Keeps Pressure on Rates
The Bureau of Economic Analysis reported that the personal consumption expenditures price index rose 0.2% in July and 3.7% from a year earlier. The annual rate was unchanged from June and slightly above the 3.6% consensus estimate cited by FactSet. Core PCE, which excludes food and energy, rose 0.2% for the month and 3.3% from a year earlier.
Consumer spending increased 0.2% in current dollars, while inflation-adjusted spending was virtually unchanged. Personal income rose 0.4%, disposable personal income increased 0.5%, and the personal saving rate was 3.0%.
Separately, the second estimate of second-quarter real GDP showed annualized growth of 1.5%, unchanged from the advance estimate and below the first quarter's 2.1% pace. The combination of persistent inflation and slower real spending growth presents a difficult policy mix: inflation remains well above the Federal Reserve's 2% target even as economic momentum appears less robust.
Treasury Yields Edge Higher; Oil Slips
The 10-year Treasury yield ended at 4.65%, up from 4.64% late Tuesday. The move was small, but it reversed part of the relief delivered by falling yields earlier in the week. Market pricing still indicated a strong probability of at least one Federal Reserve rate increase by year-end, according to CME Group data cited by the Associated Press.
Brent crude settled 0.4% lower at $86.94 per barrel after trading as low as $84.56. The international benchmark has retreated from $94 at the end of the previous week, although uncertainty about the war with Iran and the movement of tankers through the Persian Gulf continues to produce sharp intraday swings.
Lower oil can ease future inflation pressure, but Wednesday's PCE figures describe price changes that have already occurred. It would therefore be premature to infer from the recent oil decline that the inflation problem has been resolved.
Company Movers and Nvidia's After-Hours Report
Abercrombie & Fitch surged 35.7% after reporting stronger-than-expected quarterly profit and raising its full-year earnings and share-repurchase outlook. J.M. Smucker gained 4.3% after beating expectations and lifting its annual profit forecast.
Intuit fell 3.2%. Although the company exceeded quarterly profit expectations, its forecast for nearly 25% profit growth in the new fiscal year fell short of analysts' projections. Meta Platforms rose 1.1% after agreeing to pay up to $18 billion and add child-safety measures to settle litigation over teen social-media addiction.
After the regular session, Nvidia reported fiscal second-quarter revenue of $96.22 billion, up 106% from a year earlier and above analysts' $92.27 billion consensus cited by FactSet. Adjusted earnings were $2.22 per share versus the $2.09 consensus, while net income rose to $59.69 billion from $26.42 billion a year earlier.
The results are reported facts available after the closing bell and are not reflected in Wednesday's index closes. They provide evidence that demand for Nvidia's AI chips remained strong during the quarter, but the broader market response will depend on management's outlook and how investors reassess already elevated expectations.
What Investors Should Watch Next
Thursday's regular session will show the market's full response to Nvidia's results. Semiconductor suppliers, networking companies, data-center operators, and other AI-linked stocks may move with investors' interpretation of Nvidia's guidance, not merely its backward-looking earnings beat.
Federal Reserve Chair Kevin Warsh's Friday speech at the Jackson Hole symposium remains the week's main policy event. Investors will listen for how the Fed weighs 3.7% PCE inflation against slower consumer spending and second-quarter growth.
The 10-year Treasury yield and Brent crude remain the most useful cross-market indicators. A renewed rise in yields would tighten financial conditions and pressure rate-sensitive stocks, while further oil declines could help the inflation outlook. Geopolitical headlines could reverse the oil move quickly.
The verified facts support a neutral reading of the regular session: stocks barely moved, yields rose only slightly, and oil declined. Nvidia's strong report then introduced a new positive signal for AI demand, but its effect on the broader market was still developing after hours.
Sources
- Associated Press: Wall Street holds mostly steady following the latest update on inflation
- Associated Press: How major U.S. stock indexes fared Wednesday
- U.S. Bureau of Economic Analysis: Personal Income and Outlays, July 2026
- U.S. Bureau of Economic Analysis: GDP, second estimate, and corporate profits for the second quarter
- Associated Press: Strong AI chip demand fuels Nvidia's second-quarter results
Market data reflects the U.S. regular trading session on August 26, 2026; Nvidia results were released after the close. This article is for informational purposes only and is not investment advice.