James Brodie
Head of Learning & Development, Flux
US July PCE Inflation Above Expectations, Nvidia Q2 Revenue
US PCE hits 3.7%, core 3.3%; new home sales sink 10.5%; Nvidia posts record Q2, guides big growth; BOK hikes to 3.00%.
US July PCE inflation, the Fed's preferred inflation metric, hits 3.7%, above expectations of 3.6%.
Core PCE inflation was 3.3%, the second highest reading since October 2024. US inflation continues to run at nearly double the Fed's 2.0% target (own assets or be left behind!). US GDP came in at 1.5% QoQ (Q2 estimate), matching estimates and down from 21% in Q1.
U.S. new home sales fell 10.5% MoM in July to 607,000 units, the lowest level in 6 months and far worse than the 1.4% decline expected. Excluding January 2026, this was the weakest reading since November 2022. New home sales have now declined in 3 of the last 4 months and are down 6.3% YoY.
Nvidia reported record Q2 revenue of $96.2 billion - up 106% year-on-year - with data centres generating $89 billion alone and margins holding at 75%, before guiding Q3 at $108 billion assuming zero China data centre revenue, implying +1,730% revenue growth in just four years. The CFO guided fiscal 2028 revenue growth of 70% against analyst expectations of 44%, suggesting the $570 billion consensus is understated by at least $100 billion, while Jensen Huang used the call to endorse nuclear as the primary power source for data centres - projecting electricity consumption to grow from 6% to 20% of total U.S. supply by 2035. Shares rallied 5% - though specific concerns remain around memory costs squeezing future margins, capex return on investment, and circular arrangements where Nvidia funds the customers buying its chips. At $5 trillion-plus, this is the most extraordinary growth story in corporate history - but the market is still deciding whether even Nvidia can grow into its own valuation.
Anthropic is targeting an IPO as soon as end of August at a $2 trillion valuation - larger than South Korea's entire economy, equivalent to Spain's GDP, and 12.5 times the combined annual revenue of every tech company in the S&P 500.
The Bank of Korea raised rates by 25 bps to 3.00%, marking its second straight hike and the first back-to-back rate increases since the COVID era. The central bank also raised its 2026 GDP growth forecast to 3.3% from 2.6%, signalling stronger confidence in the economy even as it tightens policy.
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