U.S. stocks closed higher on Thursday, August 27, as Nvidia's blowout fiscal second-quarter results reset expectations for artificial intelligence spending and lifted the broader technology sector. The Nasdaq Composite led gains while investors also digested a stronger reading on weekly jobless claims and a sharply widening trade deficit tied to AI-related imports. The session capped a data-heavy week that also opened the Federal Reserve's Jackson Hole symposium, with Chair Kevin Warsh's first keynote in the role due the following day.

Nvidia Delivers a Beat-and-Raise Quarter

Nvidia reported fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier and 18% from the prior quarter, comfortably above the $92.1 billion analysts had expected. Non-GAAP earnings per share came in at $2.22 versus consensus of $2.09, marking a fifth consecutive quarter of topping Wall Street estimates. Data center revenue, the company's core AI business, reached $89 billion, up 117% year over year, while gross margin held at 75%. Management guided third-quarter revenue to $108 billion, well above the roughly $104.8 billion analysts expected, and pointed to about 70% revenue growth for fiscal 2028, far higher than the 44% consensus, pushing shares up 8.7% to close at $227.98.

Chip Sector Broadens the Rally

The strong report rippled across semiconductors and lifted the wider market. Broadcom rose 4.5% to $371.54 on renewed optimism about AI infrastructure spending, while Advanced Micro Devices slipped 0.9% to $476.67 as some investors rotated capital toward Nvidia specifically rather than the sector as a whole. The Nasdaq Composite closed at 26,541.35, up 1.57%, its best single-day gain in weeks, while the S&P 500 advanced 0.72% to 7,730.99, both closing near record territory. The Dow Jones Industrial Average lagged with a more modest 0.2% gain to 53,569.44, weighed down by sectors outside technology as the rally stayed concentrated in AI-linked names rather than spreading broadly across the index.

Jobless Claims Fall as Trade Deficit Widens

Away from earnings, the Labor Department reported initial jobless claims fell by 4,000 to 203,000 in the week ended August 22, better than the roughly 208,000 economists had forecast and consistent with a labor market that has stayed resilient through the summer despite months of policy uncertainty. The four-week moving average ticked up to 205,500. Separately, the Commerce Department's advance report showed the goods trade deficit widened sharply to $118.8 billion in July from $101.4 billion in June, the largest monthly gap since March 2025, as capital goods imports, including computers and semiconductors tied to AI buildouts, jumped 11.3% to $140.1 billion while exports declined.

Jackson Hole Opens Ahead of Warsh's First Keynote

The Federal Reserve's annual Jackson Hole symposium got underway Thursday evening in Wyoming, hosted by Kansas City Fed President Jeff Schmid under the theme "Financial Innovation: Implications for Payments and Policy." Attention is centered on Friday's keynote address by Fed Chair Kevin Warsh, his first as head of the central bank, where investors will look for signals on the path of interest rates amid sticky inflation and a jittery bond market. With equities sitting near record levels after Nvidia's results and the labor market still holding firm, the tone heading into the speech remained one of cautious anticipation rather than conviction.

Daily market analysis by BCM Markets.