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On the 26th (local time), the three major indices of the U.S. stock market closed mixed. The Dow Jones Industrial Average reached an all-time high as Federal Reserve Chair Jerome Powell hinted at a potential interest rate cut in September. Investors are closely watching the upcoming earnings report from AI giant Nvidia and the July Personal Consumption Expenditures (PCE) price index.

The Dow Jones rose 65.44 points (0.16%) to close at 41,240.52, setting a new record high. Meanwhile, the S&P 500 fell by 17.77 points (0.32%) to 5,616.84, and the Nasdaq dropped 152.03 points (0.85%) to 17,725.76.

Tech stocks saw a decline, with Nvidia, ahead of its earnings release, falling by 2.25%. Other semiconductor stocks like Broadcom and Micron also dropped by 4.05% and 3.83%, respectively. Boeing fell by 0.85% after reports that NASA astronauts would use SpaceX's spacecraft instead of Boeing's to return from the International Space Station (ISS). PDD Holdings, the parent company of e-commerce platform Temu, plummeted by 28.51% due to disappointing quarterly results.

Concerns over Nvidia's upcoming earnings weighed on investor sentiment. Nvidia is expected to report its Q2 fiscal 2025 results (May-July) after the market closes on the 28th, with forecasts of more than doubling revenue and operating income, reaching $28.6 billion and $18.7 billion, respectively. The market's direction will likely hinge on whether Nvidia meets these expectations.

Baird investment strategist Ross Mayfield noted, "There is some nervousness about Nvidia's upcoming earnings in the tech sector," adding that while the market is in a relatively healthy state, it would be challenging to make significant progress if tech stocks, which hold a large weight in the indices, lag behind.

Chris Larkin, head of trading at Morgan Stanley E*TRADE, commented, "To hit new highs this week, the market needs to avoid major surprises in earnings, particularly from Nvidia, which has been driving sentiment in the tech sector."

On the previous trading day, August 23, the New York stock market surged across the board due to the "Powell effect." Powell indicated that "the time to adjust policy has come," signaling a potential rate cut in September. He stated that while the labor market is "unmistakably" slowing, he does not want to see further cooling. He emphasized the goal of maintaining a strong labor market while avoiding a sharp rise in unemployment. Powell also noted increased confidence that inflation is sustainably easing toward 2%, though he refrained from specifying the magnitude of the rate cuts, stating that it would depend on future data.

Investors are confident in a September rate cut following Powell's remarks. According to CME FedWatch, the federal funds futures market is fully pricing in a 100% chance that the Fed will cut rates by at least 0.25 percentage points in September, with a 69.5% chance of a 0.25 percentage point cut and a 30.5% chance of a larger 0.5 percentage point "big cut."

Sam Stovall, chief investment strategist at CFRA Research, predicted, "We expect them to cut rates by 25 basis points each in September, November, and December," adding that the Fed wants to assure the market that they are not lagging while also avoiding entering an easing mode too quickly.

The key factor will be the August jobs report, released before the Federal Open Market Committee (FOMC) meeting on September 17-18. If the unemployment rate, which jumped from 4.1% in June to 4.3% in July, rises further in August, it could strengthen the case for a bigger rate cut by the Fed.

Investors are also focused on the July PCE price index, set to be released on the 30th. The index is expected to rise by 0.2% month-over-month and 2.5% year-over-year, matching or slightly exceeding June's figures. A continued stable trend in inflation is likely to support expectations of a September rate cut by the Fed.

Treasury yields held steady, with the 2-year yield, sensitive to monetary policy, rising by 2 basis points to 3.93%, and the 10-year yield, the global benchmark, inching up by 1 basis point to 3.81%.

International oil prices surged by over 3% due to heightened tensions in the Middle East and production cuts in Libya. West Texas Intermediate (WTI) rose by $2.59 (3.5%) to $77.42 per barrel, while Brent crude, the global benchmark, increased by $2.41 (3.05%) to $81.43 per barrel.