Markets spent the week trading around one event risk, with chipmaker volatility ahead of Nvidia's earnings overshadowing a more constructive oil story.

By Wednesday, attention shifted from geopolitics to the Fed, as bond yields surged on renewed hike speculation.

The dominant driver has been positioning ahead of Nvidia's results.

Nvidia fell for seven straight sessions, its longest slump since 2022, after reports that major clients were alerted to AI related price hikes above 15 percent.

A memory chip ETF dropped 5.9 percent and the Nasdaq 100 fell 1 percent.

That reversed Tuesday, when a broad comeback in chipmakers ended Nvidia's losing streak and the Nasdaq 100 outperformed.

By Wednesday, shares slid again 1.6 percent as the earnings date closed in and the S&P 500 fluctuated.

The swings say more about positioning than fundamentals, trading on anticipation rather than new information.

Away from chips, oil and geopolitics improved through the week.

Brent fell below 90 dollars on optimism for a resumption of shipments through Hormuz, with Iran and Oman discussing a temporary framework.

Reports that the US would recall diplomats from Middle Eastern embassies added to the sense the conflict was not expanding.

That followed Treasury Secretary Bessent threatening sanctions on any country doing business with Iran to isolate the country.

Lower oil eased inflation concerns and lifted Treasuries, though Wednesday brought a partial reversal on news of Russia escalating its fight in Ukraine.

The clearest shift this week has been rate expectations.

Consumer confidence fell to its lowest level since the start of the year, as conditions and job prospects deteriorated. Yet bond yields still surged on hike speculation.

Core PCE data met expectations on Wednesday, rising 3.3 percent year over year, but stayed well above target. Second quarter GDP was unrevised at 1.5 percent, with data showing stronger spending and investment than first reported.

Money markets now fully price a rate hike by December.

AI earnings risk → Chipmaker volatility → Oil and geopolitics → Inflation → Federal Reserve → Equity leadership

• Nvidia's earnings are the single biggest catalyst in play
• Inflation data is coming in as expected but still running above target
• Rate hike odds by December are now fully priced
• Consumer confidence is weakening even as growth holds up

The market has stopped reacting to headlines and started waiting on one number: Nvidia's results, against a Fed turning hawkish regardless.

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