PCE Ticks Higher in July, NVIDIA Reports After the Close

Wednesday, August 26th, 2026

Pre-market futures are basically mixed at this hour, following a truckload of economic data hitting the tape a few minutes ago. The all-important price indexes from the U.S. Bureau of Economic Analysis (BEA), including a first update on Q2 Gross Domestic Product (GDP).
 

Q2 GDP Stays at +1.5%

A steady GDP on the second print, at a still-low +1.5%, is countered somewhat by year-over year Consumption, which rose 20 basis points (bps) to +3.4%, and the Price Index, which also grew +20 bps to +6.4% — the highest read we’ve seen on this metric in four years. Thus, while productivity inches along through mid-year, prices continue to creep up. Basically, nothing the average American consumer didn’t already know.
 

July PCE Numbers Show Growth, Modest Inflation

Meanwhile, Personal Income for July doubled expectations to +0.4% month over month, while Consumer Spending also doubled expectations to +0.2%. This is slightly cooler than the +0.3% June spending print. Real Spending (adjusted for inflation) came in flat: 0.0%, in-line with expectations and down from +0.4% posted a month ago.

The PCE Price Index also reached +0.2% versus expectations of +0.1%, and this followed a negative -0.1% for June. Year-over-year matched the +3.7% reported a month ago, 10 bps higher than anticipated. Core PCE was +0.2% for the month and +3.3% for the year, as analysts had been expecting. 

These demonstrate inflation rates continue to drift higher, but not in huge bites. Considering that we’re unlikely to see +2% inflation any time in the near future, what the Fed has long been advocating as an optimal inflation rate, we don’t see anything dire in these numbers per se.
 

Durable Goods Orders Jump in July

Elsewhere, Durable Goods Orders last month more than doubled expectations — +1.1% versus +0.5% — from an unrevised +0.3% from June. This is the second-strongest month of the year so far, following April’s +8.5%. Ex-Transportation, this figure drops down to +0.4%, 20 bps lower than projections. The June revision, however, grew 40 bps to +1.1%. 

Non-Defense, ex-aircraft (a proxy for “normal” business spending) pulls way back to +0.2%, from +0.7% forecast. But the revision for June was also much higher: from +1.2% originally posted to +1.7% this morning. Shipments reached +1.4% for July; the June print was revised 40 bps higher to +2.4%.

Lots of numbers jumbling around, no doubt, but ultimately goods orders are holding up relatively well. Over the past 12 months, these orders have been positive in seven of them. Relative ebb and flow, which might be more reassuring with the idea that the world is a more volatile place (Iran war, tariffs) than it was a couple years ago. 
 

What to Expect from Today’s Stock Market

Focus in today’s market will be on the three “N”s: NVIDIA NVDA, NVIDIA, NVIDIA. The AI chip supplier without peer reports Q2 earnings after today’s closing bell. As per typical, expectations are for another terrific quarter: +99% earnings growth, +96.5% on revenues. Even more impressive is that these numbers have steep growth comps; the AI trade took off at the start of 2024, and NVIDIA has provided the GPUs from the beginning.

The stock is up another +14% year to date (+850% over the past five years), but there are questions. Key among them is the notion of “circular financing,” which means NVIDIA has been lending its own money to burgeoning AI companies to purchase their chips. Is there a long-term plan that can be spelled out by CEO Jensen Huang today? Huang has run point on the AI narrative overall for the past couple years, but can he explain how the current business climate breaks in NVIDIA’s favor going forward?

Recall NVIDIA gave $30 billion to OpenAI this past February, but importantly it came with no milestones for chip deployment. OpenAI then developed its own Jalapeno chip with NVIDIA competitor Broadcom AVGO, which is more or less a direct competitor to NVIDIA’s Blackwell processors. If Huang can explain the long-term strategy of NVIDIA’s vision for the world of AI upon these sorts of developments, today would be a great day to get that ball rolling.

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