Published August 21, 2026
Investors have been stuck in recent days fretting over interest rates while the tech rally hits a wall. The note below from Marketwatch highlights what might unstick tech stocks and the broader market.
“It’s been a week dominated by the bond market. The vacillation in Treasurys following the U.S. government’s pledge to suppress longer-duration yields have rattled stock investors, too.
Next week, however, traders will have an opportunity refocus their attention on equity fundamentals when Nvidia releases its earnings and guidance after Wednesday’s close.
The problem for bulls is that, to support the wider market, Nvidia may need to break a disappointing trend, according to the team at Bespoke Investment.
Before we explain that, here’s the setup. There’s been some chatter of late that the most important stock in the market right now is Micron Technology, because the supply/demand imbalance for its memory chips acts as a thermometer for the broader technology sector, particularly the artificial-intelligence build-out.
But Nvidia remains the dominant force. Its earnings still serve as a barometer of the health of the AI ecosystem. Crucially, the company run by Jensen Huang sits at the center of much of the dealmaking that’s shaping the AI boom.
And, with a capitalization of $5.26 trillion, Nvidia is the market’s biggest company, carrying a 7.6% weighting in the S&P 500. The company is second in the list of hedge funds’ :very important positions” (Amazon is first), according to Goldman Sachs.
With such sentiment and statistical heft, Nvidia’s earnings can thus shape the broader market. Option traders are currently pricing in a move from now until the close of play next Friday of plus or minus 5.3% for Nvidia’s stock, which is a top-to-bottom range of some $562 billion in market cap, based on MarketWatch calculations using FactSet data.
A positive for Nvidia investors is that shares haven’t seen the kind of pre-earnings surge that could lead to profit taking even if it delivers good news. Indeed, since the company’s last earnings report, the stock has gained only about 1%. Furthermore, it’s relatively cheap by historical standards, with its next 12-month price-to-earnings ratio at around 20, way down from a five-year average of 63, according to FactSet.
So, the set-up for Nvidia looks promising. But there’s a problem, says Bespoke, in commentary posted late Thursday. The research and analytical boutique says Nvidia is “a triple-play king, meaning it consistently beats [earnings per share] and revenue estimates and raises guidance.”
Source: Bespoke Investment
Indeed, Nvidia has completed 14 triple plays in 20 quarterly earnings reports over the past five years.
However, on the occasions of Nvidia’s last three triple plays, shares have actually finished down on the day.
“For most companies, it’s not common to report an earnings triple play, but for NVDA, it’s now expected. Recent negative share-price reactions to the positive news are evidence of that,” says Bespoke.
“In baseball, you can’t do better than a triple play on defense,” they add. Nvidia and Huang, though, are not playing baseball. It looks, according to the Bespoke team, “as if NVDA needs to do even more than simply reporting a triple play to get a post-earnings boost.”
Market Update
A dip in retail sales and a rise in oil prices and interest rates dampened stocks Monday with the Nasdaq slipping -0.3%. Strength in memory chip/disk shares helped prevent a deeper loss. But the sector sank badly Tuesday bringing down the Nasdaq -1.3%. The 30-year Treasury bond yield ticked notably higher as bond markets globally were under some strain. The 30-year yield has reached heights not seen in 20 years as sharply elevated commodity prices have added to existing inflation pressures. The announcement of an increase in bond market purchases by the Treasury Department sent rates tumbling Wednesday to aid stocks. Positive results from a cancer vaccine study pushed healthcare shares sharply higher. Retail earnings reports were a mixed bag. In the end, the stock indexes held their losing streak to three days but managed only a +0.2% lift. Stocks resumed their fall Thursday, however, as interest rates shrugged off the prior day’s Treasury announcement and returned to their upward bias. The Trump Administration announced an economic war on Iran as the sides have failed to reach any agreement on the Strait of Hormuz. Adding to Thursday’s sour mood was an earnings report from Walmart describing a soft sales outlook for the coming quarter. Stocks bounced back Friday despite a further rise in interest rates with stock indexes closing +0.4% higher for the day.
Stock indexes gave back a chunk of their recent gains this week with the S&P 500 dipping -1.37%. The Nasdaq 100 (QQQ) was down -2.41% while small cap shares gave back -1.68%.
Warm wishes and until next week.