S&P 500 Drops Amid Nvidia Earnings, Fed Rate-Cut Outlook

U.S. stock markets have recently experienced volatility amid investor anticipation of Nvidia's upcoming quarterly earnings and the Federal Reserve's potential interest rate cut. Nvidia, a key driver of the S&P 500 and a major player in the AI sector, saw its shares rise ahead of the earnings report, which is expected to significantly influence the market. President Donald Trump's decision to fire Federal Reserve Governor Lisa Cook has raised concerns about the Fed's independence, though the consensus remains that a 25-basis-point rate cut is likely in September due to signs of labor market weakness and economic slowdown. Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Symposium have further fueled speculation about easing monetary policy, with major brokerages revising their forecasts accordingly. Important economic indicators, including the Personal Consumption Expenditures Price Index and nonfarm payrolls data, are awaited by investors for clearer guidance on the Fed's next moves. Overall, while the market digests recent gains and political developments, Nvidia's earnings and upcoming economic data will be pivotal in shaping investor sentiment and the trajectory of U.S. markets.