Good morning,

For the first time in history, the S&P 500 crossed 6,500 as investors hold their breath for today’s inflation print.

There are a few things driving the optimism. Nvidia’s earnings gave just enough juice to keep the AI trade alive (barely), while a surprise GDP revision handed Wall Street another excuse for record valuations…

... right before Dollar General hit us with a sobering retail reality check.

Meanwhile, jobless claims are still trending down on paper… but anecdotal data, including fresh layoffs from Nike and Ford, says otherwise.

In today’s episode of Trump vs. the Fed, Lisa Cook is officially suing President Trump in what’s shaping up to be the ugliest Fed showdown in decades.

And Intel just confirmed it... Uncle Sam now owns a $5.7 billion stake in America’s chip crown jewel. Let’s just say “unprecedented times” doesn’t quite cover this week.

Let's dig in.

Quote of the day 

Five things to know before opening bell

🧮 Wall Street buckles up for PCE inflation read

Today’s PCE print caps a busy week and could settle the stagflation debate once and for all. Wall Street bets it’ll keep the “soft landing” story alive. Gold, stocks, and Bitcoin all ticked higher Thursday, with the S&P 500 crossing the 6,500 mark for the first time in history.

📉 Jobless claims dip, but hiring still weak

Initial jobless claims fell by 5,000 last week to 229,000, coming in slightly better than expected. But don’t pop the champagne just yet. The drop in layoffs is only one side of the coin. Hiring has slowed to a trickle, with job growth averaging just 35,000 over the past three months down from 123,000 during the same stretch last year.

👟 Nike, Ford slash jobs

Layoffs are back in the headlines. Nike announced it’s cutting just under 1% of its corporate staff on top of the 1,600 jobs it already axed last year. Ford is trimming 470 roles from its South African operations, citing weaker demand, tariffs, and global supply chain headaches.

⚖️ Lisa Cook sues Trump

Governor Lisa Cook officially filed a lawsuit against President Trump, accusing him of violating her Fifth Amendment rights and the Federal Reserve Act as he moves to remove her from office. A court hearing is scheduled for today. The White House is leaning into the fight, with NEC director Kevin Hassett arguing Cook should have stepped aside when fraud allegations first surfaced, claiming her refusal to do so “is partisan” and undermines Fed independence.

🇺🇸 Intel confirms $5.7B government stake

Intel dropped new details on its blockbuster deal, confirming a $5.7 billion cash infusion from Uncle Sam in exchange for a nearly 10% stake in the company. CFO David Zinsner said there’s little chance the company gives up majority control of its foundry unit, meaning a warrant for an additional 5% stake will likely expire unused. 

📈 Nvidia has Wall Street scratching their heads

Nvidia’s earnings was supposed to deliver answers. Instead, it handed Wall Street another head-scratcher.

The first company to ever crack a $4 trillion valuation closed out Big Tech earnings season last night, and expectations were sky high.

With its chips powering the global AI boom, analysts wanted a clear bullish or bearish signal for a jittery sector. What they got instead was a mixed bag:

• Revenue jumped 56% year over year, topping expectations

• Total revenue landed at $54 billion, only a hair above forecasts

• Data center sales — the crown jewel — came in just shy of estimates

The result was no big relief rally, no panic sell-off. Nvidia slipped less than 1% on the day, while benchmark indexes held in the green.

📊 Are analysts still believers?

The numbers themselves were solid, but what was missing in the guidance raised eyebrows.

“They didn’t include China in their guide,” noted Melius tech research head Ben Reitzes. “Some people were hoping for a firmer stance that China sales could get going.”

Others flagged that Nvidia’s breakneck pace is slowing. “Data center revenues saw the smallest sequential increase since F1Q24,” said DA Davidson’s Gil Luria, pointing to trade tensions with Beijing as a drag.

The missing guidance didn't spoil the AI party on Wall Street, though.

UBS called the outlook for large-cap tech “compelling,” while HSBC warned of “near-term supply inconsistency and China uncertainty” hanging over the stock. 

Morgan Stanley added that China once made up 20% of Nvidia’s data center revenue — and it’s unclear “if it comes back at all.”

🗣️ Huang gets the last word

CEO Jensen Huang, of course, downplayed the China concerns.

“We obviously had a record quarter without China, and we just guided another record quarter without China,” he told investors. “It’s incredible growth.”

💡 Bottom line: Nvidia didn’t light a new fire under the AI trade, but it didn’t snuff it out either. For now, the rally limps on.

😯 Another GDP surprise

Wall Street bulls finally caught a break. Revised GDP numbers out Thursday showed the economy grew faster in Q2 than first thought.

The Bureau of Economic Analysis now pegs Q2 growth at 3.3%, up from the earlier 3% read. That follows a painful 0.5% contraction in Q1.

Even better, real final sales to private domestic purchasers — a cleaner gauge of demand — jumped from 0.7% to 1.9%.

That effectively means the economy managed to absorb tariffs, trade tensions, and political drama last quarter. The real question is whether that resilience carries through Q3.

💬 What analysts are saying

The upgrade buys the Fed some breathing room. “There is no urgency for policymakers, if one was looking strictly at the data,” said BMO’s Jennifer Lee.

Others see it as proof worst-case fears aren’t materializing.
“After the initial release, there were concerns the domestic economy was slowing quite sharply. These latest data suggest the economy is a bit stronger than initially feared,” wrote Moneyfarm CIO Richard Flax.

Meanwhile, SMI Group’s Kenin Spivak argued tariffs and trade deals could actually lift GDP over time.

But not everyone is sold. LPL’s Jeffrey Roach countered that growth will likely “flatline in the third quarter,” adding more pressure on the Fed to cut rates.

💡 Bottom line: A stronger Q2 is nice, but the trillion-dollar question is how much tariff fallout was baked into that read.

🛒 Dollar General sounding the alarm

Discount retailers have been the clear winners this earnings season. Americans are hunting bargains, and chains like Ross and TJX are thriving while big-box and specialty retailers fall behind.

So when Dollar General released Q2 results, a beat across the board didn’t shock anyone. What did surprise investors was the warning that came with it.

📊 A strong quarter on paper

By most accounts, Q2 2025 was solid. Inflation cooled more than feared, unemployment stayed historically low, and most companies topped earnings expectations.

Dollar General joined the club:

• EPS beat by $0.30
  

• Sales grew 5%
  

• Same-store sales rose 2.8% year over year
  

• Guidance was raised across the board

On paper, it was everything shareholders wanted to hear.

⚠️ The big caveat

The guidance told a different story. American consumers are tightening their belts, and management made clear the pressure will only build.

CFO Kelly Dilts warned that spending would “slow further as we move through the back half of the year, with Q4 potentially more impacted than Q3.”

Investors weren’t sure what to make of it. DG stock tanked early Thursday before clawing back losses to finish flat.

For now, Dollar General is beating expectations. But its caution adds to a growing chorus that consumer strength is on shaky ground heading into year-end.

We’ll get another clue later today when the University of Michigan drops its final August consumer sentiment survey.

💡 Bottom line: Dollar General’s numbers scream resilience, but its guidance says the U.S. shopper is running out of runway.