Week in review: Stocks stumble, Nvidia bankrolls OpenAI, and iPhone sales surprise

The stock market concluded a volatile week with the S&P 500 and Nasdaq both down approximately 1%, as strong economic data, including an unexpected drop in jobless claims and upward GDP revision, fueled concerns about potential Federal Reserve interest rate policy, overshadowing a Friday rebound on in-line core PCE inflation. Amidst this, Nvidia announced a significant $100 billion investment in OpenAI for AI data centers, underscoring continued AI sector growth, while Boeing gained on reports of a major China deal and eased FAA restrictions. Conversely, Costco shares declined nearly 3% despite an earnings beat, due to weaker same-store sales, while Apple rose 4% on robust iPhone demand and positive analyst sentiment.

Analysis

The broader market experienced a volatile week, with the S&P 500 and Nasdaq closing down nearly 1% and just over 1% respectively, as strong economic data created headwinds for equities. An unexpected drop in weekly jobless claims and an upward revision to Q2 GDP growth fueled investor concerns that the Federal Reserve would have less impetus to lower interest rates, causing a mid-week sell-off. A subsequent in-line core PCE inflation report on Friday provided some relief, but was not enough to reverse the weekly losses. In company-specific news, Nvidia announced a landmark $100 billion investment into OpenAI, a development management confirmed is additive to all previous financial projections, signaling that analyst outlooks for 2026 require upward revision. Boeing stock rallied, gaining over 3.5% in Friday's session, on dual catalysts of easing FAA delivery restrictions and reports of being in the final stages of a major jet order from China. Conversely, Costco shares fell nearly 4% for the week despite beating revenue and earnings expectations, as the market focused on weaker-than-expected same-store sales and a dip in membership renewal rates. Apple was a notable outperformer, rising 4% for the week, driven by strong initial demand for its new iPhone models, which T-Mobile confirmed led to its 'biggest iPhone week' ever, prompting a price target increase from Wedbush to a Street-high of $310.

Key Decisions for Investors

• Given Nvidia's $100 billion OpenAI deal is incremental to existing guidance, investors should re-evaluate long-term earnings models for 2026 and beyond, while also considering related infrastructure plays like GE Vernova and Eaton which benefit from rising energy demand for AI.
• Boeing's potential re-entry into the Chinese market and the loosening of FAA restrictions represent significant positive shifts in its risk profile, making its stated $275 price target a key level to watch, though geopolitical and execution risks remain.
• The negative market reaction to Costco's results, despite top and bottom-line beats, signals heightened sensitivity to forward-looking metrics; long-term holders may view the subsequent stock decline as an opportunity in a quality defensive name, while short-term traders should note the negative sentiment shift.
• With Apple showing strong early iPhone demand confirmed by carriers and bullish analyst revisions, investors should monitor for further data points on the sustainability of the upgrade cycle, as this is the primary driver of near-term performance.
• The market's negative reaction to strong economic data underscores a continued fixation on Fed policy, so investors should closely watch inflation indicators like the core PCE, as they will heavily influence the likelihood of the half-point rate cut currently priced in by year-end.