Market Wrap | S&P 500 and Nasdaq Rise as Fed Signals Rate Cut Possibility Nvidia Forecasts Trillion Dollar AI Spending Surge

On August 27, 2025, the S&P 500, Dow Jones, and Nasdaq indices rose by 0.24%, 0.32%, and 0.21% respectively. New York Federal Reserve Bank President John Williams indicated that interest rates might decrease, but policymakers need to examine upcoming economic data to determine whether a rate cut is appropriate at the September meeting. Williams also noted that the economy is growing at an annual rate of approximately 1% to 1.5%, suggesting moderate economic expansion that could impact monetary policy decisions.

The technology, consumer staples, energy, and real estate sectors outperformed the S&P 500, with the energy sector showing particularly strong performance. Conversely, the healthcare and industrial sectors moved in the opposite direction of the S&P 500.

Nvidia's CFO forecasts a significant rise in AI infrastructure spending, reaching $3-4 trillion by the century's end. The company also approved a substantial $600 billion stock buyback, reflecting strong confidence in its growth trajectory. Despite slightly missing market expectations for Q2 data center revenue, Nvidia projects a promising third fiscal quarter with revenue expected to be around $540 billion, surpassing market predictions. Meanwhile, Google's investment of $9 billion into cloud and AI infrastructure in Virginia highlights the growing importance of AI and data centers, which could impact competition and innovation in the sector. Additionally, Federal Reserve discussions on potential interest rate changes underscore the ongoing economic assessment, affecting market sentiment and investor decisions.