Nvidia reported after Wednesday’s close and beat on every line that mattered. Revenue of $96.2 billion, up 106% from a year ago. Data Center revenue of $89.0 billion, up 117%. Guidance for next quarter of $108 billion, and that number assumes zero Data Center compute revenue from China. The stock is up 7.4%.
The S&P 500 is up 0.6%.
That gap is the whole letter. The largest company in the index just grew revenue by more than 100% and guided higher, and the index it dominates managed six tenths of one percent. Something else is going on underneath, and there are two things worth your attention today. The first is what the chips did. The second is what a Federal Reserve official said this morning while everyone was reading earnings.
Where The Year Stands
Small caps still own the year. IWM is up 21.7% against the S&P’s 13.0%, and it has held that lead through three months of headlines that had nothing to do with small caps.
Bitcoin keeps doing the thing nobody is writing about. IBIT is up 17.8% in a week and 28.2% on the month, and it has clawed its year-to-date hole from double digits down to −8.0%. A month ago it was the worst thing on this board by a wide margin. It is now within striking distance of flat on the year, and it did all of it while the financial press was writing about semiconductors.
Gold is up 13.3% on the month and flat today. Long treasuries have recovered a little over a point of their year-to-date loss since the start of August.
The Sector Board
One sector is green. Ten are red.
That is what a +0.6% day in the S&P is made of when technology carries 2.6% and everything else leans against it. Yesterday the board was a genuine rotation, with industrials and energy leading and technology barely positive. Today it is not a rotation at all. It is one sector doing all the work and the other ten quietly funding it.
A breadth picture like this is not a warning by itself. It becomes one when the single sector doing the lifting is also the one holding the crowd.
Under The Index: What The Chips Actually Did
This is the part that surprised me.
Nvidia beat, guided higher, and the memory names went down. Micron −1.8%. SanDisk −1.7%. Marvell finished the morning at unchanged. AMD is red. The only two chips joining the party are Broadcom and Intel, and Intel is running its own story this year.
If the AI buildout is accelerating the way that $108 billion guide implies, the companies that sell the memory into those racks should be having a very good day. They are not.
There’s a mechanism for at least part of it. SK Hynix confirmed this morning it is breaking ground on a $4 billion memory facility in Indiana. New memory supply is exactly the news a memory shareholder does not want on a day when demand is being confirmed, because the bull case for Micron and SanDisk was never demand. It was scarcity. Confirmed demand plus new supply is a different trade than confirmed demand alone.
And then there is the second number in that table, the one that should reset how you think about this year:
Nvidia is up 20.7% year to date. Micron is up 222.9%. SanDisk is up 520.6%. AMD is up 123.5%. Intel is up 147.6%.
Nvidia is having a worse year than the Russell 2000. The stock everyone treats as the market is losing to small caps, and it is still 4.8% below its own 52-week high after a 7% day on the best quarter it has ever printed. The AI trade in 2026 has not been Nvidia. It has been everything that supplies Nvidia, and today those names took the day off while Nvidia got the headline.
Credit, Commodities And The Rest Of The World
Credit did not move at all. High yield unchanged, high grade unchanged, TIPS unchanged, municipals unchanged, Treasuries unchanged. Convertibles were the only thing with a pulse, up 0.3%, which is a technology bid rather than a credit signal. On a day the index is up and the largest company in it is up 7%, that is a bond market registering nothing.
Rates barely moved either. The 10-year sits near 4.65%, down about a basis point on the day. The 30-year is near 5.17%.
Watch the Brent-WTI spread, not the oil price. Brent is up 1.3% and WTI is up 0.2%, which takes the spread from about $5.95 yesterday to $6.60 today. That is a 65-cent widening in a single session, and it is not a demand story. It is a shipping story.
CENTCOM said today that in enforcing the blockade against Iran, its forces have now redirected 75 commercial vessels, disabled three and boarded two. Brent is the seaborne barrel and WTI is the landlocked one. When the risk is to ships rather than to wells, Brent carries the premium and the spread widens. Running the other direction, Qatar’s prime minister met Iran’s Ghalibaf in Tehran today, pressing to restart the diplomatic track. Two forces, one spread. That spread is now the cleanest live read on the Gulf that a screen will give you.
Energy equities went the other way from the barrel again, with XLE the worst sector at −1.3%.
Natural gas was the strongest commodity for a second straight day. LNG feedgas flows have climbed to roughly 19.5 Bcf a day, up 11.6% week over week, with hotter forecasts adding power demand and a storage build that came in under estimate.
Around the world, the split is neat and it is about chips. South Korea was the best market on the board at +1.0% — Samsung and SK Hynix, the actual Nvidia supply chain. Germany +0.4%, Japan +0.2%. Everything else was red: the UK −0.6%, Brazil −0.7%, China −0.9%, and France worst at −1.8% on a day of loud campaign politics in Paris. Emerging markets beat developed, +0.4% against −0.4%. The dollar did not move, and neither did the yen, euro or pound.
The Thing Nobody Traded This Morning
While the tape was reading Nvidia’s press release, Cleveland Fed president Beth Hammack was on CNBC making the case for raising interest rates.
Her comments, this morning:
“Now is the time to act given the persistence of inflation.”
She does not see Fed policy providing restriction for the economy.
It is appropriate for the Fed to act to lower inflation.
Above-target inflation has been persistent, with questions about how the shocks play out.
Her main worry is that the public loses confidence that inflation returns to 2%.
Her business contacts are very worried about inflation and the cost of living.
She is worried an inflationary mindset may be forming.
She believes the neutral rate is on the higher side relative to other Fed officials.
This is not a random hawk. Hammack dissented at the July FOMC meeting, where she wanted a quarter-point hike and the committee held. She has said publicly that it will take more than one hike to bring inflation down, and that the current 3.50%–3.75% range is not meaningfully restricting the economy.
She said all of that on the opening day of the Jackson Hole symposium, twenty-four hours before Kevin Warsh gives his first keynote as Fed Chair, Friday morning at 10:00 a.m. Eastern. New chairs use a first major speech to set the frame. This one arrives with a dissenting president publicly arguing for hikes, core inflation that has not come down, and a market positioned as though none of it is live.
The market’s answer today was to buy technology and sell the VIX.
Trusted Voices
Keith McCullough, Hedgeye, this morning. Chart of the day: software longs are up 32%, 43% and 78% since May 26 against $IGV at +9%. He is also “pruning and planting” today rather than adding. This is the third straight session he has made the same argument from a different piece of evidence: Tuesday it was breadth, with equal-weight beating cap-weight; Wednesday it was high yield “voting for Quad1”; today it is software leadership. Worth noting what today’s tape did with that. Salesforce is up 21.3% and CrowdStrike is up 18.0% — CrowdStrike’s biggest jump in two years. The best percentage moves of the day were not in semiconductors at all. They were in software.
Doug Kass, Seabreeze Partners, this morning. The bear case on the print, and it is about timing rather than numbers: “NVDA’s curiously sudden revenue reveal ahead of its customer / ‘investment’ Anthropic’s IPO.” His full note, “More Tales From Nvidia: Promises, Promises,” is issue #243 of that series, which tells you he has been making this argument for a long time and has not been paid for it yet. Take it as a question about circularity between a supplier and the customers it also funds, not as a call on the quarter. It is the right question to keep asking on a day like today.
Steve Miller, this morning. Short and to the point: Micron traders and investors are “most probably in shock over this morning’s action” after the Nvidia report. He is describing exactly what the dispersion table above shows, from inside the name.
Tiffany Wilding, PIMCO, this morning. On the long end: Treasury buybacks can support market liquidity, but they cannot control the broader forces driving long-term yields, and Treasury is unlikely to move far from its “regular and predictable” framework. Relevant with the 30-year at 5.17% and TLT still down 4.5% on the year. Nobody is coming to rescue the long bond.
Yuriy Matso, this morning. One level for the traders: on the 4-hour chart, Nasdaq futures need to reclaim 30,000 to open the door to the next leg higher. Concrete, falsifiable, and worth having on the screen tomorrow morning.
One more, filed under risk rather than opinion. The CFA Institute is warning that private credit is being pushed into retail portfolios, and that the problem is liquidity: some funds offer periodic redemptions while holding loans that are hard to sell or value in a downturn. That is a structural mismatch, it is being sold to individuals, and it is the kind of thing that looks fine until the day it doesn’t.
Bottom Line
Yesterday we said the VIX at 15.43 into a binary event was not an invitation, and that if you wanted to sell that volatility you should wait until after the print, when the volatility was real and you were being paid for it.
The event happened, and the volatility never showed up. VIX is 14.48 and lower. The CBOE 9-day VIX, which covers exactly the window that just passed, is near 12.1 and down more than 9% today. The largest scheduled catalyst of the quarter cleared, and the market priced less risk on the other side of it than it did going in.
So the honest update is this: waiting was right, and it did not pay. There was no volatility to collect afterward. That happens, and it is better to say so than to quietly move on to the next idea.
Here is what actually matters now.
The market spent today on the wrong story. Nvidia’s quarter was the headline, but Nvidia is having a worse year than the Russell 2000 and its own suppliers sold off on its best-ever print. Ten of eleven sectors are red. Credit did not move a basis point. And a sitting, dissenting Fed president spent the morning arguing on television that policy is not restrictive and it is time to act on inflation — the day before a brand-new Fed Chair gives his first Jackson Hole keynote.
Nine-day volatility is at 12.1 going into that keynote. Friday also brings the preliminary annual benchmark revision to payrolls, which has moved this market before. Two events, one morning, and the shortest-dated volatility in the complex is priced as though the calendar is empty.
For a premium seller, that cuts one way.
Selling short-dated premium into Friday morning is the same mistake as selling it into Wednesday’s print, except cheaper and with a worse catalyst. At least Nvidia was a number. A first speech from a new Fed Chair is a frame, and frames reprice the whole curve rather than one stock. Twelve-handle nine-day volatility is not compensation for that.
The place the money has actually been made this year is under the index, not on it. Memory up 200% to 500%, AMD up 124%, Intel up 148%, software leadership that most people missed, and bitcoin quietly up 28% on the month. Meanwhile the index is up 13% and the name everyone watches is up 21%. Dispersion this wide is a gift to anyone who trades structure and position size, and a trap for anyone trading the index and assuming it represents what is underneath.
The index is calm. Almost nothing inside it is.
Tony Rihan and Tony Battista Grow Your Pile
Every options trade in all three portfolios is published, win or lose, with entry, exit and running P&L at growyourpile.com.