Markets enter a defining week following Friday's dramatic turnaround that saw the S&P 500 ($SPX) (SPY) and Dow hit new highs after Fed Chair Jerome Powell's game-changing Jackson Hole speech declared that conditions "may warrant" rate cuts. The market rally struggled for much of last week, particularly hitting Nasdaq and growth stocks hard, before Powell's dovish pivot triggered a powerful Friday rebound that lifted indexes and leading stocks from or above key technical levels. The key question facing investors is whether Friday's growth stock resurgence represents a sustainable reassertion of market leadership or merely a one-off relief rally, with defense plays having shown relative strength during the week's volatility but finishing with more muted gains. Wednesday's Nvidia (NVDA) earnings and guidance will serve as the ultimate test for both the market rally's sustainability and which sectors will lead going forward. The week also brings Friday's Core PCE Price Index alongside Q2 GDP revisions and a packed earnings calendar featuring cloud computing and AI infrastructure companies.

Here are 5 things to watch this week in the Market.

Nvidia's AI Empire Assessment

Wednesday's Nvidia (NVDA) earnings represent the week's most consequential event, serving as both a litmus test for the AI infrastructure buildout and a catalyst that could determine market leadership going forward. The results will be closely scrutinized for data center revenue growth, gaming segment performance, and crucially, management's guidance about future AI chip demand and pricing trends. Nvidia's commentary on customer inventory levels, competition from custom chips developed by hyperscalers, and the sustainability of current AI investment cycles will be particularly important given recent volatility in technology stocks and Friday's dramatic growth stock rebound. The earnings come at a critical juncture as investors question whether growth stocks can maintain momentum following Powell's dovish Jackson Hole comments or if recent defensive rotations will resume. Nvidia's results could significantly influence not only semiconductor stocks but also cloud computing companies, AI infrastructure plays, and the broader technology sector that has driven much of this year's market gains.

Powell Pivot Follow-Through and Fed Policy

Friday's Core PCE Price Index at 8:30am will provide the Federal Reserve's preferred inflation measure, taking on heightened significance following Powell's Jackson Hole speech that opened the door to rate cuts by suggesting conditions "may warrant" policy adjustments. Both month-over-month and year-over-year readings will be closely watched for evidence supporting Powell's more dovish stance or potential contradictions that could complicate the Fed's messaging. The data arrives as markets have rapidly repriced rate cut expectations, with September 17 odds around 85% and investors betting on multiple cuts through year-end. Wednesday's FOMC meeting minutes at 2pm will provide additional context for interpreting Powell's Jackson Hole pivot, offering insights into the internal Fed discussions that shaped recent policy thinking. Any significant deviation in inflation data from expectations could either reinforce or undermine Powell's dovish shift, creating substantial volatility in rate-sensitive sectors.

Cloud Computing and Cybersecurity Earnings

Wednesday brings a critical test for cloud infrastructure and cybersecurity sectors with Snowflake (SNOW) and CrowdStrike (CRWD) reporting alongside Nvidia. Snowflake's results will provide insights into data analytics demand and cloud data warehouse adoption amid ongoing enterprise digital transformation trends. CrowdStrike's earnings will offer perspective on cybersecurity spending and enterprise security priorities, particularly important given increasing global cyber threats and regulatory compliance requirements. These results will help determine whether Friday's growth stock rally can sustain momentum or if recent defensive rotations will resume. Both companies represent high-growth technology plays that have been sensitive to interest rate expectations and investor risk appetite, making their results particularly relevant following Powell's dovish comments.

Economic Growth and Consumer Fundamentals

Thursday's Q2 GDP revision at 8:30am will provide an updated view of economic growth momentum, while Tuesday's durable goods orders and consumer confidence data offer insights into business investment and household sentiment. The GDP revision comes amid ongoing questions about economic sustainability and provides context for the Fed's policy deliberations following Powell's Jackson Hole speech. Consumer confidence at 10am Tuesday will be particularly important for assessing household optimism about future economic conditions and spending intentions in light of recent labor market changes. Monday's new home sales data will provide additional perspective on housing market trends amid evolving mortgage rate expectations following Powell's dovish pivot. The convergence of growth measurements and forward-looking indicators creates potential for significant market reactions if data collectively suggests accelerating or decelerating economic momentum.

Global Technology and Geopolitical Backdrop

The week features several international technology earnings providing global perspective on digital trends and enterprise spending. PDD Holdings (PDD) Monday will offer insights into Chinese e-commerce and consumer behavior, while Alibaba (BABA) Friday provides additional perspective on Asian market dynamics. Dell (DELL) and Marvell (MRVL) Thursday will provide insights into enterprise hardware demand and semiconductor trends. The earnings backdrop unfolds amid ongoing geopolitical developments following Trump's meetings with Putin and Zelenskyy, which could influence international business sentiment and cross-border technology investments. Companies with significant international exposure may face questions about geopolitical risks and supply chain considerations during their earnings calls.

Best of luck this week and don't forget to check out my daily options article.