The stock market rally was little changed for the week, even with the S&P 500 hitting fresh highs. Nvidia delivered strong growth but data center sales came in a little light and China uncertainty is a concern, exacerbated by Alibaba, which jumped as it reportedly eyes its own AI chip. Nvidia stock fell but many AI plays flashed buy signals. Meanwhile, software rebounded, aided by Snowflake and MongoDB. Burlington Stores and Build-A-Bear were retail earnings winners while Urban Outfitters tumbled. Affirm and Iren also were earnings winners, but there were some big losers as well.
Stock Market Gives Up Gains
The stock market rally was narrowly mixed for the week, with the S&P 500 hitting new highs. The Dow Jones edged lower despite hitting a record high close Thursday. The small-cap Russell 2000 climbed to an eight-month high. While Nvidia didn't move much on its own earnings, many other AI stocks did. Software stocks rebounded, buoyed by some big earnings winners. The 10-year Treasury yield fell toward four-month lows.
China Mars Nvidia Report
Nvidia beat fiscal Q2 expectations with EPS up 54% and revenue jumping 56% to $46.74 billion. The AI chip giant guided to Q3 revenue of $54 billion, up 54% and edging above views. But Nvidia reported no China AI chip sales in Q2 and expects no such sales in Q3, given U.S. regulatory and geopolitical issues. China has pressured domestic companies to not buy Nvidia chips. If it can resolve those issues, Nvidia said it could realize $2 billion to $5 billion in sales of H20 chips to China. CEO Jensen Huang wants to sell a more-advanced AI chip in China and has been in discussions with the Trump administration. Nvidia stock turned lower for the week on China concerns, exacerbated by Alibaba reports.
PCE Inflation Won't Derail Rate Cut
The Federal Reserve's key inflation gauge, the core PCE price index, edged higher in line with forecasts and keeping markets confident in a return to rate-cutting on Sept. 17. Core prices rose 0.3% in July, pushing the 12-month core inflation rate to 2.9% from 2.8%. Services prices rose, while goods prices were flat on the month — despite tariffs. Meanwhile, second-quarter GDP growth was revised up to 3.3% from 3%. Consumer spending continued to hang in there pretty well in July, growing 0.5%. Meanwhile, the latest initial and ongoing jobless claims fell, consistent with a steady unemployment rate. Still, economists see a soft patch ahead as tariffs are pushed through to consumer prices, squeezing purchasing power.
Trump-Cook Fight About Fed Control
President Donald Trump said Monday night that he's firing Federal Reserve Gov. Lisa Cook Monday night, citing claims of false mortgage statements as sufficient cause. Cook said "he has no authority to do so" and said she will not resign but fight the president in court. Trump is looking to significantly alter the makeup of the Federal Open Market Committee (FOMC), as he calls for major rate cuts. Replacing Cook could give Trump a majority on the Fed Board, which could then block the reappointment of regional Fed presidents, usually a formality.
Alibaba Gaps Up On Cloud, AI Chip
Alibaba Group posted a mixed fiscal Q1 but saw its stock gap higher on reports that it is developing an AI chip alternative to Nvidia. Alibaba also impressed with a 26% increase in cloud revenue, which it credited to AI demand. Adjusted EPS fell 10% in local currency, better than feared, though a 2% revenue gain missed. Meanwhile, China e-commerce rival PDD Holdings reported a 5% EPS drop and 7% revenue rise in local currency, both beating. Shares jumped on results, but tumbled for a solid weekly loss.
Snowflake Earnings Soar 94%
The software maker easily beat Q2 EPS views, with revenue's 32% gain to $1.1 billion just beating. Snowflake forecast Q3 product revenue slightly above consensus. Shares skyrocketed to a three-year high.
Cybersecurity Firms Beat Views
CrowdStrike said Q2 earnings fell 10% while revenue including acquisitions rose 21% to $1.17 billion, both beating. The company guided slightly lower on Q3 revenue. CrowdStrike also plans to buy Onum Security, a provider of real-time telemetry management. Shares reversed higher from the 200-day line. Okta reported Q2 EPS up 26% with revenue climbing to $728 million. The San Francisco-based identity-security firm guided higher on Q3 revenue. Shares rose but slashed gains. SentinelOne rose after beating Q2 EPS views while a 22% revenue gain to $242.2 million was in line.
Veeva Misses On One Key Metric
Veeva Systems tumbled back below a buy point and the 50-day line despite beating second-quarter sales expectations and raising full-years guidance. The medical software-maker missed strict, as-reported GAAP earnings expectations. Q2 EPS climbed 23% while revenue rose 17% to $789.1 million.
Urban Outfitters Sees Stock Decay
Urban Outfitters topped Q2 estimates with a 27% increase in earnings on 11% revenue growth. Overall comparable sales grew 5.6% and outpaced views, with growth across all three of Urban Outfitters' main brands. Nuuly, its clothing rental business, saw sales jump 53%. COO Frank Conforti warned that tariffs could impact gross margins by 75 basis points for the second half of the year, but the retailer is confident longer term. Still, URBN stock dived back below a buy point and its 50-day line. Abercrombie & Fitch edged out Q2 views with EPS up 16% while sales growth slowed again, to 7%. Hollister brand sales grew 19%. But Abercrombie brand sales fell 5%. Abercrombie generally raised full-year targets, despite some tariff expectations. Shares rose modestly but are below their long-sliding 200-day.
Discounters Growth Strong
Five Below, Burlington Stores and Ollie's Bargain Outlet reported a second quarter of accelerating earnings and revenue growth, while Dollar General ended a long string of EPS declines. Five Below earnings jumped 50% vs. a year earlier and revenue climbed 24%. Shares decisively cleared a range to a fresh 52-week high. Ollie's EPS grew 27% and revenue 17.5%, but shares erased Thursday's big initial gains. Burlington Stores easily beat on earnings with a 42% gain while a 10% revenue rise also topped. Shares gapped up past a buy point, hitting a multiyear high. Dollar General delivered an 8% EPS gain. DG stock swung up and down.
Data Storage Peers Rally
Pure Storage skyrocketed to a record high following its July quarter results. Earnings decreased a less-than-feared 2% while sales grew 13% to $861 million, also beating. Pure Storage also raised its guidance for revenue and adjusted profit. The enterprise data storage firm pointed to strong AI-driven demand, including a recent contract win with Meta Platforms. Data storage rival NetApp posted fiscal Q1 results ahead of views, with EPS down 1% and revenue up 1%. The firm only reiterated annual guidance while there is concern about federal government spending. But shares reversed strongly higher Thursday.
Stock Market News In Brief
Affirm Holdings reported a fiscal Q4 profit of 20 cents vs. a 14-cent loss a year earlier, while revenue climbed 33% to $876 million, both comfortably beating. The buy now, pay later specialist beat gross merchandise volume metrics and guided GMV higher for 2026. Affirm's new debit card has been gaining traction.
Atour Lifestyle reported a 35% EPS gain, in line with views. Revenue climbed 36%, beating. Shares of the Chinese hotel operator spiked above a buy point. Meanwhile, Chinese travel booking site Trip.com gapped up the right side of a long consolidation as strong reservations offset an earnings miss.
Eli Lilly said Tuesday it's planning to ask global regulators to approve its weight-loss pill, orforglipron, after a successful study in patients with obesity and type 2 diabetes. After 72 weeks, patients on the highest dose lost up to 10.5% of their body weight, compared to a 2.2% loss for the placebo group. The highest dose also led to a 1.8% reduction in A1C, a measure of blood sugar over time. Lilly stock jumped.
Boeing announced a big Korean Air jet order that could be worth $36 billion. Ryanair expects the Dow Jones aerospace giant to boost monthly output of 737 jets to 42 per month by October from 38 now. Also, Boeing halted negotiations with its striking machinists until "at least after Labor Day." BA stock rose from the 10-week line, flashing some early buy signals as it forges a new flat base.
Build-A-Bear mauled views with a 47% EPS gain, the second straight quarter of accelerating growth. Revenue rose 11% with the specialty toy show also raising guidance. BBW stock, already extended from a recent base, surged to fresh highs.
BYD reported second-quarter net income tumbled nearly 30% in local currency, the first year-over-year decline since Q1 2022. Revenue climbed 14% to RMB 201 billion ($28.1 billion). Both were well below views for the world's largest EV maker amid tough competition in the domestic Chinese market.
Li Auto missed Q2 views and gave weak guidance as the mainstream-to-premium China EV maker faces a lot of competition in its core SUV market.
Nutanix reported fiscal Q4 earnings per share climbed 36% with revenue up 19% to $653.3 million, both beating. But annual recurring revenue from subscription services rose 17% to $2.2 billion, slightly missing. The cloud-computing network management software maker guided fiscal 2026 revenue roughly in line. Shares tumbled but pared losses.
AT&T will buy low-band and midband wireless spectrum licenses from EchoStar in a $23 billion deal, likely to expand wireless broadband services. The FCC must OK the deal. AT&T and EchoStar also expanded their long-term wholesale network services agreement, enabling EchoStar to sell wireless services under the Boost Mobile brand. AT&T stock edged up near a buy point. SATS soared.
Semtech jumped on a beat-and-raise earnings report, helped by strong data center demand. The chipmaker's adjusted EPS rocketed 273% in its fiscal Q2, while sales rose 20% to $257.6 million.
Marvell Technology tumbled after the chipmaker posted an in-line fiscal Q2 report but guided low on sales. Q2 earnings rose 123% while sales climbed 58%, helped by custom AI chips and electro-optics products.
Dell Technologies topped views for its fiscal Q2 with EPS and sales up 19%. For Q3, the tech giant guided low on EPS but up on revenue.
Best Buy dropped after the consumer electronics retailer reported its fourth straight quarter of declining earnings, off 4% in Q2. Sales rose 2% to $9.4 billion, the first gain in 15 quarters.
MongoDB stock rocketed more than 40% for the week after its fiscal Q2 results beat views, allaying fears about AI challenging enterprise software spending. Adjusted earnings increased 42.5% to $1 per share for the July-ended quarter. Sales grew 24% to $591 million.
