Stocks closed higher yesterday with all of the indexes, once again, in the green. The S&P 500 also made another new all-time high in the process, the second in as many days. The tech-heavy Nasdaq, however, was the top performing index yesterday with 0.53%.

While NVIDIA was down modestly yesterday, giving up just -0.79% after Wednesday afternoon's earnings, when they reported a quarterly EPS growth rate of 54% and a sales growth of 56%, other tech and AI related names performed well yesterday.

As they should.

For one, Wednesday's earnings were in no way shape or form a negative for NVIDIA. It was another stellar quarter. Their 10th positive EPS surprise out of 11 quarters. And they were up 34.7% since their previous earnings report. So, they were ripe for a little bit of profit taking.

What their report showed was that the AI trade is alive and well, and the demand for chips, datacenters and other AI related products does not seem to be slowing. In fact, the soaring demand for AI related products is unprecedented. And is likely to help fuel this historic rally far into the future.

So, no surprise that many AI-related names soared after NVIDIA's earnings.

And I would expect NVDIA to eventually do the same very soon.

In other news yesterday, the market also got a boost from the second estimate of Q2 GDP. The first estimate, last month, came in at 3.0% vs. the consensus for 2.5% at that time. The consensus for the second estimate was for 3.1% and instead it came in at 3.3%, as consumer spending and business investment beat expectations.

Weekly Jobless Claims fell by -5,000 to 229K vs. views for 230K.

And the Kansas City Fed Manufacturing Index was steady at 1, in line with last month.

Today, all eyes will be on the Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge). The headline number is expected to come in at 0.2% m/m vs. last month's 0.3%. The y/y rate is forecast at 2.6%, the same as last month. The core rate (ex-food & energy) is estimated at 0.3% m/m, like last month. The y/y rate is expected to tick up to 2.9% vs. last month's 2.8%.

Fed Chair Jerome Powell, at last week's Jackson Hole speech, finally acknowledged that a rate cut at the September 16-17 FOMC meeting might be warranted, citing that labor market risks have increased vs. inflation. And that the "base case" remains that the recent price increases (which are showing up in moderate rises in inflation) will be a "one-time" shift due to tariffs, rather than ongoing increases.

But, of course, it's not a done deal yet. And the Fed maintains it will be data dependent. So, all eyes will be on this morning's inflation report.

Note: the market is closed on Monday, September 1^st, for Labor Day. So, today will be the last trading day before the 3-day long holiday weekend.

Going into the day, all of the major indexes are up for the week. If it finishes that way, it will be the 4th up week in row for the Dow, S&P 500 and small-cap Russell 2000, and the 3rd up week out of 4 for the Nasdaq. It will also mark the 4th up month in a row for the first three indexes I mentioned, and the 5th up month in a row for the Nasdaq.

See you tomorrow,