What’s News in Markets: Nvidia’s Victory Lap, Callaway Lands in the Rough, Sneaker Slump
5m 29s
This week, investors faced multiple concerns, including AI sustainability, oil prices, and inflation, but the focus shifted on Friday when Federal Reserve Chairman Kevin Walsh delivered his first Jackson Hole speech. He stated that inflation remains too high and suggested the central bank might not be done raising interest rates, causing short-term Treasury yields to jump and major indexes to slip. However, Walsh also offered an upbeat economic assessment, noting resilience on Main Street and Wall Street. By week's end, the Nasdaq rose 0.85%, the S&P 500 gained 0.49%, and the Dow added 0.53%. NVIDIA broke its post-earnings curse, with shares surging 8.7% Thursday after the company projected 70% revenue growth for the next fiscal year, far exceeding analyst expectations. CEO Jensen Huang noted demand is even stronger, though supply constraints limit growth. Despite the boost, questions about the AI boom's durability remain, as NVIDIA increasingly uses its balance sheet to finance customer purchases, exposing it to potential slowdowns. Elsewhere, Callaway Golf apologized for a controversial ad that went viral, leading to a 1.3% weekly stock drop, while Nike fell 2.9% after Dick's Sporting Goods slashed its outlook due to excess sneaker inventory and industry-wide discounting. These factors pressured the athletic wear sector, with other retailers like On-running and Under Armour also declining. Overall, the week highlighted mixed signals from the Fed, strong tech earnings, and ongoing retail challenges.
Hey, listeners. It's Saturday, August 29th. I'm Imani Moise for The Wall Street Journal.
And this is what's news in markets. Our look at the biggest stock moves of the week and
the news that drove them. Let's dive in. Investors came into the week worrying about everything
from the sustainability of the AI boom to oil prices and inflation. And on Friday, Federal
Reserve Chairman Kevin Walsh gave markets something new to chew at the Kansas City Fed's
annual conference. In his first Jackson Hole speech as chair, Walsh said inflation remains
too high and signaled the central bank may not be finished raising interest rates.
We must be confident that underlying inflation is moving to our objective clearly and at
sufficient speed. Otherwise, we have work to do.
Short-term Treasury yields jumped and major indexes slipped on Friday.
After his remarks, still, Walsh offered a relatively upbeat assessment of the economy.
I'm impressed by the overall performance of the economy, which appears to have strengthened.
One indicator of strength is how well an economy holds up under stress, how well it holds up
under shocks. On that score, both Main Street and Wall Street have been remarkably resilient.
Overall, the Nasdaq ended the week 0.85 percent higher.
The S&P 500 was the highest in the past year.
The S&P 500 gained 0.49 percent, and the Dow added 0.53 percent.
NVIDIA has broken its post-earnings curse.
Before this week, the chip giant's shares had fallen the day after six of its previous
eight earnings reports, as investors grew accustomed to quarter after quarter of blockbuster
results.
This time was different.
NVIDIA shares surged 8.7 percent Thursday, their biggest one-day jump in more than a
year.
After the company said it expects revenue to grow 70 percent in its next fiscal year,
far above the roughly 45 percent analysts had been forecasting.
CEO Jensen Huang said demand is actually even stronger than that.
The biggest thing holding NVIDIA back right now is getting enough chips and components
to meet it.
Overall, NVIDIA shares ended the week 1.3 percent higher, lifting the market value of
the world's most valuable company to $5.5 trillion.
But NVIDIA's victory lap?
NVIDIA's victory lap?
doesn't mean questions about the durability of the AI boom have disappeared.
The company is increasingly using its own balance sheet to help customers pay for the
massive data center build-out needed to buy its chips.
That strategy could help keep sales booming for now.
But it also leaves NVIDIA more exposed if AI demand eventually slows.
As Granite Shares CEO Ro Rein told the Journal this week, the bigger questions now are about
the broader AI narrative.
"I'm not sure if I'm going to be able to get the money I want to buy the chips I want to buy, but I'm not sure if I'm going to be able to get the money I want to buy the chips I want to buy."
"I'm not sure if I'm going to be able to get the money I want to buy the chips I want to buy the chips I want to buy."
Callaway Golf learned a pretty basic business lesson this week.
Try not to alienate your fastest-growing customer base.
The golf equipment maker found itself apologizing for an ad that showed a male golfer shoving a woman to the ground.
"Do not touch my new driver."
The video was produced by privately held media company Good Good Golf to promote a co-branded
Callaway Golf Club.
It racked up more than 5 million views on X, and plenty of backlash.
Both companies eventually apologized, with Callaway's CEO saying the ad's approval "should
never have happened."
Recently, Callaway posted a strong quarter.
But Syracuse University sports analytics professor Justin Erlich told our colleagues at MarketWatch
that the company's ability to attract new golfers, especially women, "may be compromised."
This week, the stock shares fell 2 percent Tuesday as a controversy unfolded, and ended
the week about 1.3 percent lower.
And one of the worst-performing stocks in the Dow this week was Nike.
Not because of anything the sneaker maker did, but because of something a competitor said.
Dick's Sporting Goods shares plunged more than 30 percent Tuesday, the stock's biggest
one-day drop on record, after the retailer cut its annual profit outlook.
The company's executive chairman, Ed Stack, said the sneaker industry's success was a
sign that the sneaker industry is carrying too much inventory.
Brands have been offering bigger discounts to move shoes off the shelves, and those promotions
are spilling into the broader market.
Stack expects the pressure to continue through the rest of this year.
That's bad news for the athletic wear industry, and especially Nike, which had already cut
its outlook in June, citing weaker demand and heavier discounting.
Nike and Dick's Sporting Goods fell 2.9 percent and 26 percent, respectively.
That extended into other sports retailers.
On-running fell nearly 4 percent this week, while Under Armour has lost more than 6 percent.
And now you know what's news in markets this week.
You can read about more stocks that moved on the week's news in our live markets coverage
on WSJ.com.
Today's show was produced by Anthony Bansi with supervising producer Melanie Roy.
I'm Imani Moise.
Have a great weekend and see you next Saturday.
Thanks for watching!
Podcast Summary
Key Points:
Federal Reserve Chairman Kevin Walsh signaled inflation remains too high and hinted at possible further rate hikes during his Jackson Hole speech.
Major stock indexes ended the week higher, with the Nasdaq up 0.85%, the S&P 500 gaining 0.49%, and the Dow adding 0.53%.
NVIDIA shares surged 8.7% Thursday after forecasting 70% revenue growth, breaking its post-earnings slump, but concerns about AI demand durability persist.
Callaway Golf apologized for a controversial ad showing a male golfer shoving a woman, which sparked backlash and a 1.3% weekly stock decline.
Nike fell 2.9% this week after Dick's Sporting Goods cut its outlook, citing excess sneaker inventory and heavy discounting across the industry.
Summary:
This week, investors faced multiple concerns, including AI sustainability, oil prices, and inflation, but the focus shifted on Friday when Federal Reserve Chairman Kevin Walsh delivered his first Jackson Hole speech. He stated that inflation remains too high and suggested the central bank might not be done raising interest rates, causing short-term Treasury yields to jump and major indexes to slip. However, Walsh also offered an upbeat economic assessment, noting resilience on Main Street and Wall Street.
53%. 7% Thursday after the company projected 70% revenue growth for the next fiscal year, far exceeding analyst expectations. CEO Jensen Huang noted demand is even stronger, though supply constraints limit growth.
Despite the boost, questions about the AI boom's durability remain, as NVIDIA increasingly uses its balance sheet to finance customer purchases, exposing it to potential slowdowns. 9% after Dick's Sporting Goods slashed its outlook due to excess sneaker inventory and industry-wide discounting. These factors pressured the athletic wear sector, with other retailers like On-running and Under Armour also declining.
Overall, the week highlighted mixed signals from the Fed, strong tech earnings, and ongoing retail challenges.
FAQs
The Jackson Hole speech is an annual address by the Federal Reserve Chair at the Kansas City Fed's economic conference. It is significant because it often signals future monetary policy direction, and this year's hawkish tone on inflation caused short-term Treasury yields to jump and major indexes to slip.
NVIDIA's stock surged 8.7% because the company forecast 70% revenue growth for its next fiscal year, far exceeding analyst expectations of roughly 45%. This broke the pattern where shares typically fell after earnings, as the stronger-than-expected outlook reassured investors.
NVIDIA is increasingly using its own balance sheet to help customers finance data center purchases. This strategy supports near-term sales growth but exposes NVIDIA to greater financial risk if AI demand slows, as it could face repayment defaults or asset write-downs.
Callaway Golf faced backlash for an ad showing a male golfer shoving a woman, produced by Good Good Golf. The company apologized, but the controversy led to a 2% stock drop on Tuesday and a 1.3% weekly decline, potentially harming its appeal to female golfers.
Dick's Sporting Goods' stock plunged over 30% on Tuesday after the retailer cut its annual profit outlook due to excess sneaker inventory and heavy discounting. This was the largest one-day drop on record, reflecting concerns about industry-wide pricing pressures.
The discounting pressure spread to the broader athletic wear market, causing Nike shares to fall 2.9%, On-running to drop nearly 4%, and Under Armour to lose over 6% for the week. This was driven by competitors' promotions and weaker demand, impacting the entire sector.
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