NVIDIA, JPM & 2 More Stocks to Buy as Oil, Rates & AI Reshape Market
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NVIDIA, JPM & 2 More Stocks to Buy as Oil, Rates & AI Reshape Market
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The U.S. stock market is facing three competing forces heading into the final week of August. First is NVIDIA‘s NVDA second-quarter fiscal 2027 earnings tomorrow, which could offer fresh evidence on the pace of AI investment. Next are new inflation risks from elevated oil prices and a Federal Reserve with little room to ease aggressively. The setup favors companies with identifiable earnings drivers rather than stocks dependent solely on multiple expansion.
The July CPI rose 3.4% year over year, while core CPI increased 2.5% and energy prices jumped 14.7%, according to the Bureau of Labor Statistics (BLS). At the same time, real GDP expanded just 1.5% annualized in the second quarter, down from 2.1% in the first quarter, according to the Bureau of Economic Analysis (BEA).
Against this backdrop, investors should buy these four stocks that offer the highest exposure to different sides of the market’s emerging balance: NVIDIA, JPMorgan Chase JPM, Repsol REPYY and Caterpillar CAT.
One Month Price Performance
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Three Forces Are Now Driving Stock Selection
AI remains the strongest growth engine, but expectations are high: NVIDIA is scheduled to report fiscal second-quarter results on Wednesday, with the Zacks Consensus Estimate projecting $2.09 adjusted EPS on $91.85 billion in revenues. Going by a Reuters report today, options markets expect NVIDIA shares to move about 5.4% after earnings, a swing of roughly $280 billion in market value given the company’s enormous capitalization. The key question is no longer whether AI demand is strong, but whether hyperscaler capital spending can continue supporting extraordinary semiconductor growth.
Rates remain a constraint: The Fed held the federal funds target at 3.5%-3.75% at its July meeting. The Fed’s inflation concerns make Friday’s Jackson Hole speech (the Federal Reserve’s annual Jackson Hole economic policy symposium) especially important for markets. If Chair Kevin Warsh signals that inflation is easing enough to allow rate cuts, Treasury yields could fall, supporting growth stocks whose valuations are more sensitive to interest rates. Conversely, if he emphasizes the need to keep rates higher for longer to contain inflation, elevated bond yields could continue to put pressure on high-valuation stocks (Reuters).
Oil adds another inflation channel: Going by multiple sources, the U.S. Strategic Petroleum Reserve fell by about 3.7 million barrels last week to 289.7 million barrels, its lowest level since 1982, according to Department of Energy data. Meanwhile, the IMF projects global growth of 3% in 2026 but says the Middle East war is weighing on energy importers and that global disinflation has stalled. Together, elevated energy prices and renewed inflation risks could limit the Fed’s room to cut rates, keeping borrowing costs and equity valuations in focus.
At the same time, fiscal policy is supporting the investment side of the economy. The Internal Revenue Service (IRS) says the One Big Beautiful Bill Act (OBBBA) made 100% first-year depreciation permanent for eligible property acquired after Jan. 19, 2025, while qualified production property can receive a deduction of up to 100%. That incentive could support capital spending on equipment, manufacturing facilities and infrastructure, creating a favorable backdrop for industrial and technology companies benefiting from the U.S. investment cycle.
4 Stocks to Buy Now
NVIDIA: It remains a key beneficiary of the AI infrastructure cycle. Fiscal first-quarter revenues rose 85% year over year, while Data Center revenues jumped 92% and networking revenues surged 199%. For the Aug. 26 report, Data Center growth, Vera Rubin demand and the outlook for AI infrastructure spending are expected to be crucial for investors.
This Zacks Rank #2 (Buy) stock is expected to report fiscal second-quarter earnings growth of 99.1% on revenue growth of 96.5% year over year. It also holds an Earnings ESP of +0.92%. Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
JPMorgan: The company remains well-positioned given the current operating backdrop. Its second-quarter 2026 results reflected solid gains in capital markets and investment banking (IB). Its consumer franchise keeps widening, with U.S. branch builds and Chase digital growth in Europe, while scale, diversified revenues and disciplined balance sheet management aid durable earnings.
This Zacks Rank #2 stock is projected to report full-year 2026 earnings growth of 22.6% on revenue growth of 13.3%. Its earnings topped estimates in each of the trailing four quarters, the average surprise being 7.33%.
Repsol: It provides exposure to oil prices and geopolitical supply disruptions. Its Upstream adjusted income increased 6.7% year over year in the first half of 2026, while the Customer business grew 5.1%. Its Industrial business posted a sharp improvement, with adjusted income rising to €1.683 billion from €235 million a year earlier, driven mainly by higher refining margins. Repsol said energy-market volatility increased significantly following the conflict in Iran, with supply restrictions contributing to higher oil and refined-product price volatility.
This Zacks Rank #2 stock is projected to report third-quarter and full-year 2026 earnings growth of 120.7% and 113.3%, respectively.
Caterpillar: Its outlook is supported by broad demand across construction, mining and power markets, with rising sales to users and a record backlog improving revenue visibility. Order momentum remains strong across all primary segments. Power & Energy is benefiting from data-center power needs and healthy oil and gas activity, while capacity additions expand the company’s ability to serve multi-year demand. The Construction Industries segment remains supported by infrastructure, rental fleet investment and large projects.
This Zacks Rank #1 stock is projected to report full-year 2026 earnings growth of 42.4% on revenue growth of 16.6%. Its earnings topped estimates in each of the trailing four quarters, the average surprise being 18.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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