Source: Charles Schwab, data from 8/17 – 8/21

Weekly Market Minute

“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.”
— Ray Dalio

🧭 This Week In the Markets

Image Source: Andrew Harnik/Getty Images

U.S. Debt Surpasses $40 Trillion for the First Time

U.S. government debt surpassed $40 trillion for the first time this week, more than doubling from $19.4 trillion a decade ago as persistent budget deficits continue to add to the nation’s borrowing needs. The federal government recorded a $432.3 billion deficit in July, bringing the year-to-date shortfall close to $1.8 trillion. Interest expense on the national debt has reached nearly $1.2 trillion this year, making it one of the government’s largest expenditures.

Nvidia Uses Financial Strength to Extend Its AI Lead

Nvidia is increasingly using its financial strength to reinforce its leadership in artificial intelligence as competition from AMD, Google and other chipmakers intensifies. The company recently agreed to support up to $105 billion for a major OpenAI data center project in Ohio, following a separate initiative with leading Wall Street firms aimed at facilitating up to $500 billion of financing for Nvidia GPUs. With quarterly free cash flow reaching $48.5 billion, Nvidia is using its balance sheet to help finance the infrastructure needed to sustain AI expansion while potentially increasing demand for its own technology.

The strategy comes as competitors make progress in AI chips and data centers, but demand for computing capacity remains strong. Nvidia is also investing directly across the AI ecosystem and held $30.2 billion in marketable equity securities in its latest quarter, up from $12.9 billion a year earlier. While some investors have raised concerns that these financing arrangements could create increasingly interconnected or circular AI spending, supporters argue they could extend the AI investment cycle by providing developers with greater access to capital and computing infrastructure.

Merck and Moderna Score Major Cancer-Vaccine Breakthrough

Merck and Moderna announced positive Phase 3 results for their personalized mRNA cancer vaccine combined with Keytruda in high-risk melanoma patients. The results moved the companies closer to potentially seeking regulatory approval and provided important validation for personalized mRNA cancer treatments. Investors reacted strongly to the news, with Merck rising more than 12%, while Moderna surged roughly 177% on Wednesday.

🏢 Corporate Earnings

• The Home Depot, Inc. (HD) beat fiscal Q2 expectations, reporting adjusted earnings per share of $4.92 on revenue of nearly $47.9 billion compared with estimates of $4.73 per share and $47.27 billion, respectively. Results remained strong despite consumer spending hesitancy and ongoing fuel, energy, and other input cost pressures.
• Walmart (WMT) surpassed second-quarter expectations, reporting adjusted earnings per share of $0.81 on revenue of more than $187.94 billion compared with revenue estimates of $186.77 billion. Results were supported by strong e-commerce growth and tariff refunds, with global e-commerce sales increasing 23%.
• Alibaba Group Holding Ltd (BABA) slightly topped fiscal Q2 revenue expectations, reporting revenue of ¥268.95 billion compared with estimates of ¥268.88 billion, as revenue increased 9% year over year. However, profits fell 75% as AI-related investment weighed on results, with capital expenditures rising 75% to ¥67.7 billion.

📊 Sector Performance

5-day closing price ($) and change (%)

Source: Select Sector SPDRs, data based on the Sector SPDR ETFs as of 8/21

📰 Dollars & Sense: This Week’s Rapid Read

Teaching Teens: 4 Tips to Help Money Lessons Stick
Teens’ greatest investing advantage is time. Piquing their interest with approachable, real-world lessons can help them build a foundation for lasting financial security.

Source: Charles Schwab

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Sources: CNBC, CNBC, CNBC
Corporate Earnings: The Home Depot, Inc., Walmart, Alibaba Group Holding Ltd

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