From Powell to NVIDIA: Why this week matters

Welcome back to Hitting the Bid Weekly!

Around the Market

S&P 500 dips slightly on the week, but Powell’s speech sparks a Friday rally as investors eye NVIDIA earnings.

The “Flat” voters finally got on the board with the S&P 500 (via SPY) slipping $0.83 from last week. That’s only a 0.13% decline, but a decline nonetheless. Equities looked soft heading into Friday, then ripped higher right after Jerome Powell’s Jackson Hole speech began. SPY closed the day up about $7.50, a strong 1.2% gain. Monday lacked follow-through, leaving investors wondering if the market was simply breathing a sigh of relief with event risk behind it or waiting on NVIDIA’s earnings to set the next move. One thing’s clear: the calm before the storm rarely lasts long in markets.

For casual readers: the Fed chair’s annual Jackson Hole speech is a big deal because he sets the tone for the Federal Reserve’s stance on interest rates and the economy. A dovish tone (more supportive of growth) can give stocks a boost, while a hawkish tone (focused on fighting inflation) can drag them down.

Other key market moves last week:

• Volatility (VIX): Down slightly, off 0.2 points to 14.79

• Gold: Showing signs of life, up $32 to around $3,410

• Bonds: Turning higher, up 0.83% to 114.3

• US dollar (DXY): Choppy but firmer, up 0.25 to 98.43

• Crude oil: Building momentum, up $2 to $64.74

• Bitcoin: Extending its slide, down about $5K to $110,200

The Week Ahead

Economic Calendar

• Inflation PCE Price Index & Personal Income and Outlays (Fri 8/29 8:30a ET)

• ISM Manufacturing PMI (Tue 9/2 10:00a ET)

Notable Earnings

• NVIDIA NVDA (Wed 8/27 after close)

• Alibaba BABA (before open Fri 8/29)

Not an exhaustive list — just a few I’m watching closely for potential market impact.

On My Radar

With a market cap bigger than Amazon and Tesla combined, NVIDIA’s earnings will be a key test for AI-fueled market momentum.

With earnings this week, the #1 company on my radar is NVIDIA (NVDA). At a staggering $4.4 trillion market cap (yes, trillion), NVIDIA is the single largest company in the world. For perspective, its value exceeds Amazon (AMZN) and Tesla (TSLA) combined, and it’s also bigger than Walmart (WMT), JPMorgan (JPM), and ExxonMobil (XOM) put together. With NVIDIA making up about 7.4% of the S&P 500, its report Wednesday after the bell has the potential to ripple across the entire market. Whether it sparks fireworks or fizzles, it’s arguably the most important event of the week, especially as chatter of an AI bubble grows, highlighted by Sam Altman’s recent comments.

The stock’s run has been massive. NVIDIA bottomed at $86.62 on April 7, then ripped to an all-time high of $184.48 by August 12. After dipping to ~$169 last week, it’s already bounced back near $180.

For newer investors, here’s why earnings matter: stocks often see their biggest short-term moves around these announcements, since companies reveal how business is really doing compared to expectations. For advanced traders, that means potential opportunities in options. Normally, I’d look to sell premium through a strategy like a short iron condor on a high-priced stock like this. But here’s the catch: implied volatility rank, which measures how expensive options are relative to the past year, is under 20. That’s comparatively low for an earnings week, and I generally prefer to see IV rank in the 30–40 range before putting on this type of trade. For me, the reward isn’t worth the risk right now. So instead of forcing a setup, I’ll stay patient and see what the post-earnings action offers.

What’s Top of Mind

A simple formula to weigh speed vs. accuracy and cut through uncertainty in everyday choices.

Last week I shared my take on balancing speed and accuracy when making decisions, and how not every choice needs to be maximized. This week I want to add another math-based tool I use to bring structure to uncertainty.

This simple formula goes back to my engineering days and is a core principle in risk management. It’s not perfect math, but it reframes decisions in a way that helps me see risk more clearly.

The application of this formula gets pretty granular, but in everyday life, think of it this way: the higher the risk, the more accuracy matters. The lower the risk, the faster you can move.

Take something like choosing whether to take what looks like a shortcut on your commute. If there’s a small chance (probability) of hitting traffic while taking the shortcut but you’re headed to a job interview you can’t be late to, the consequence is big enough that the risk feels high. Stick to the main road you already know. But if you’re just going to the grocery store (same probability but now a low consequence), the same odds don’t matter as much. You might take the gamble.

This framework highlights why probability alone can mislead. A typo in a quickly drafted internal email? High probability, low consequence: you’re probably fine to just ship it. That same typo in a client proposal? Even if the probability is the same, the consequence is much larger, so the risk is high enough to warrant slowing down to decrease the chance of any errors. It’s the balance of both factors that matters, not just one in isolation.

That’s what I like about this formula: it forces you to weigh both sides. Too often, we obsess over probability (“how likely is this to happen?”) without considering impact. And on the flip side, we blow up the consequence without asking how realistic it is. Thinking about both keeps me from falling into either trap.

And it connects back to the speed-vs-accuracy tradeoff. Some decisions don’t deserve overthinking. If the risk is low, move fast. When the stakes are higher, pausing to run a quick probability-and-consequence check and using that information to identify any necessary countermeasures often leads to better outcomes.

Even with fuzzy numbers, the act of framing risk this way cuts through emotion and indecision. For me, it’s become a compass that helps sort which choices are low-stakes shortcuts and which deserve the extra pause. Now you, too, have an additional tool to know when to pause and when to just do.

P.S. Want to see more of my trades? Subscribe to my YouTube channel.

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Hitting the Bid content is for informational and entertainment purposes only. The information contained is not, nor is it intended to be, trading or investment advice or a recommendation of any security, futures contract, digital asset or alike. I may hold a position in the trading vehicles discussed. Trading and investing contains risk. All investors should evaluate their own risk tolerance, financial situation, and investment duration before entering any trade or investment.