Stocks closed lower yesterday amid profit taking from recent gains and position squaring ahead of the 3-day Labor Day weekend.

Let's talk about NVIDIA since that's what everyone was waiting for all day yesterday. After the close they reported earnings and posted a 6.25% positive EPS surprise, and a 5.72% positive sales surprise. That translated to a quarterly EPS growth rate of 152% vs. this time last year, and a sales growth of 125%. They did note that gross margins narrowed a bit due to some production issues on their next-gen Blackwell chips. But production is expected to ramp up in the coming quarters. They raised revenue guidance for the current quarter to $32.5 billion, which is 2.52% above the consensus. And they also announced a $50 billion stock buyback. NVDA was off -2.10% in the regular session before earnings. And they were down about 6% in after-hours.

In other news, MBA Mortgage Applications were up 0.5% w/w with purchases up 0.9%, and refi's down -0.1%.

And the Survey of Business Uncertainty saw U.S. firms expecting sales growth to be up 3.85% over the next 12 months vs. last month's 3.90% pace, while employment growth is expected to be up 4.42% vs. last month's 4.43%.

Today we'll get Weekly Jobless Claims, the second estimate for Q2 GDP (consensus is for 2.8%, in line with the first estimate), the International Trade in Goods report, Corporate Profits, Retail and Wholesale Inventories, and Pending Home Sales.

We'll also get more earnings with another 115 companies on deck to report, including lululemon, Marvell Technology and Best Buy to name a few.

Focus will then shift to tomorrow's Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge. Even though the annual core rate is expected to tick up by one-tenth of a percent to 2.7%, that's unlikely to interfere with the Fed's plans to cut rates when they meet again on September 17-18. Especially after Fed Chair Jerome Powell said just last week that "the time has come for policy to adjust."

Nonetheless, every data point is important and could help shape what happens after September.

Note, next Monday, 9/2 is Labor Day, which means the markets will be closed on Monday.

So, even though next week will be a shortened trading week, we could see a bit of extra volatility at the end of this week as investors square up positions ahead of the 3-day holiday weekend.

The major indexes are currently down for the week. There's still time to turn things around. But at the moment they are down, with two trading days left.

See you tomorrow,