Core PCE Holds at 3.3% as Nvidia Reports After the Close
The Fed's preferred inflation gauge landed at 8:30 a.m. ET (3:30 p.m. in Istanbul): core PCE rose 0.2% in July and 3.3% from a year earlier, matching June's annual reading and economists' forecasts. Headline PCE rose 0.2% on the month and 3.7% on the year. The core measure has now run above the Fed's 2% target for 65 consecutive months.
For the market, that keeps a September hike on the table. The funds rate sits at 3.50%-3.75%, and futures put the odds of a 25 basis point increase next month at 38% going into the release, down from 55% a month ago. Inflation that is not reaccelerating takes pressure off a hike without opening the door to a cut; the 10-year yield eased to 4.64%. The second half of the same report is softer: personal income rose 0.4% and consumer spending 0.2%, but adjusted for prices real spending grew less than 0.1%, with the saving rate at 3.0%.
The day's second story arrives tonight at 4:20 p.m. ET (11:20 p.m. in Istanbul). Nvidia reports fiscal second quarter results. Company guidance was $91B in revenue, a number built on the assumption of zero data center compute revenue from China. Wall Street is at $93.6B and $2.13 per share. What decides the reaction is not the quarter just ended but the October guide, where consensus sits near $104B. The stock ended a seven-session losing streak Tuesday with a 2.2% gain — the longest run of declines since September 2022 — and is up 12% this year against a 61% advance in the Philadelphia Semiconductor Index.
Third is oil. Iran and Oman are discussing a joint temporary navigational corridor through the Strait of Hormuz, sending Brent down 2.4% to $86.47 and WTI down 2.6% to $80.20, a more than two-week low. Tanker tracking tells a different story: one vessel transited the strait on Tuesday, and no outbound tankers were recorded over 24 hours. ING notes that a deal between the two parties does not mean flows normalize, and that volumes will not return without US sanctions relief; the same desk estimates actual transit at 2-6 million barrels a day against the 8-9 million the US cites.
