Intuit Spooks Software Stocks: 8 Key Items Shaping the Stock Market Wednesday

These are the early headlines and other items poised to influence the market at the start of trading Wednesday. As we share this collection of market drivers, U.S. equity futures point to a mixed market open. With the July PCE Price Index being published at 8:30 AM ET, you’ll want to recheck those futures once the market has had time to digest that report and its implications. See item 2 below for more on what the market is expecting.

1. Iran has held new talks with neighboring Oman on management of the Strait of Hormuz, blockaded over nearly six ‌months of conflict, with Oman’s foreign minister saying he was hopeful a temporary corridor through the waterway could be announced soon. (Reuters) Brent ‌crude futures fell for a third straight day on Wednesday, sliding more than 2% to roughly $86 per barrel on the prospect of more supply coming through the Strait of Hormuz. If this move is sustained, it would amount to the biggest weekly drop in oil prices since June. The optimism appears to be rooted in the belief that the kinetic war may be on hold now that Washington has shifted its focus to economic sanctions. Markets were cheered by news that talks have resumed between Oman and Iran about how to make the Gulf navigable again – at least temporarily. (Reuters)

2. The latest inflation data is expected to show modest price growth in July, helping keep the odds of a September interest rate hike in check. Economists surveyed by FactSet expect that PCE inflation rose 0.1% month over month in July, translating into growth of 3.6% when measured over the past 12 months. That would be a slight deceleration from June’s 3.7% year-over-year increase. Core inflation, which excludes food and energy costs, is expected to prove firmer on the month, rising 0.2%. Compared with a year ago, core inflation is expected to measure just 3.2%, a bit softer than June’s 3.3% pace. (Barron’s)

Our view has been that last week’s Flash August PMI report from S&P Global will carry a little more weight that today’s July PCE Price Index findings. Those Flash findings pointed to prices moderating in August with input costs rising at the slowest pace since February. This is welcome news as is the latest decline in oil prices and reports that meaningful progress has been made in talks aimed at de-escalation and restoring navigation through the Strait of Hormuz. Yes, we’ve been here before, and for that reason we continue to think the details of any potential peace talks will be critical. We also view traffic through the Strait as the real indicator to watch.

That said, if the July PCE Price Index data matches expectations or comes in softer than forecasted, the market’s perception of what Fed Chair Kevin Warsh may say later this week at Jackson Hole could change. Our view is the Fed chair isn’t going to show the central bank’s cards ahead of the August Employment Report.

3. Wall Street is eagerly anticipating Nvidia Corp.’s earnings on Wednesday afternoon, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence investors and the market itself… Wall Street expects Nvidia to deliver stellar results for the fiscal second quarter, which ended July 31. Analysts project that revenue nearly doubled from a year ago, which would be the fastest pace in two years, as did net income, according to data compiled by Bloomberg. That, however, isn’t what the market is focused on. Rather, investors want to hear what Chief Executive Officer Jensen Huang has to say about capital spending by its biggest customers, future demand and a spate of new financing deals that involve Nvidia. Price increases will also be top of mind after some of the company’s customers were told that the cost of servers with its AI chips will rise more than 15% in some cases, due to surging memory costs. (Bloomberg)

We agree with the view that between Nvidia’s (NVDA) July 2026 quarterly results and its outlook, the forward view will be more of a focus not only for NVDA shares but for the cohort of stocks associated with what the market calls the “AI trade.” As you know, we are not fans of that term as it implies a short-term perspective rather than the multi-year buildout for AI and data centers as well as AI adoption and usage.

Interestingly enough, we are reading that the option market is pricing in a more modest 5.4% move in either direction following Nvidia’s earnings. That’s down from 6.5% when it reported back in May and the average price swing of 7.4% over the last 12 quarters. Perhaps the market is becoming more accustomed to Nvidia’s results and comments, but that also means an unexpected surprise could have an even greater impact. As we discussed yesterday, when we examine NVDA on a multi-year basis using a price-to-earnings growth (PEG) ratio, the shares are far from expensive. A post-earnings drop would make that even more the case.

4. Intuit reported better-than-expected results for its latest quarter but its revenue outlook is likely to disappoint Wall Street, as the company looks to gain market share by potentially lowering prices across its business… Revenue for the year is expected to be between $23.3 billion to $23.5 billion, which implies 9% to 10% growth from the prior year. That’s below analyst estimates of $23.7 billion and a slowdown from the 14% revenue growth the company saw in fiscal 2026. CEO Sasan Goodarzi told Barron’s that Intuit is focused on gaining market share in a competitive environment as artificial intelligence software becomes more powerful. This means making choices like being competitive on pricing, he said, to ensure improved customer acquisition for long-term growth. (Barron’s)

The comment that Intuit (INTU) is targeting AI market share gains and will use price as means to achieve that is raising revenue and margin concerns across the software sector this morning. In our experience, using price to win market share tends to be a losing strategy over the medium to long-term. The concern is if others follow the path laid out by Intuit, a pricing war that would spark a serious rethink on profit and EPS expectations could be at hand. When Salesforce (CRM) reports after today’s market close and Elastic (ESTC) tomorrow, we will be quite interested in its pricing vs. market share comments.

5. Meta Platforms Inc. and state attorneys general have discussed a possible mid-trial settlement of a blockbuster case accusing the company of deliberately designing Facebook and Instagram to addict teens, people familiar with the matter said. (Bloomberg)

With speculation pointing to potentially massive penalties if Meta (META) loses, we’re not surprised to learn settlement talks may be on the table. The trial is expected to continue with a verdict not likely until late September or early October. That means we will continue to follow the case and adjust our thinking on META based on what we learn. It also means that any settlement could come at the eleventh hour. In our view, subject to the details, a settlement would likely lift the overhang on META shares. However, we still want to hear about other business models that may emerge based on potential settlement terms. One of those includes the teased cloud compute one, which would help defray Meta’s capex spending.

6. U.S. authorities are investigating a data breach at a small maker of water utility technology, highlighting infrastructure cybersecurity threats even though the Kansas firm was apparently not part of a suspected Iranian-affiliated campaign against water plants in Minnesota ‌and other states starting in July… Cybersecurity experts believe the attacks were part of a long-running Iranian-affiliated cyber campaign. The FBI and the Cybersecurity and Infrastructure Security Agency warned July 30 that hackers were targeting PLCs from U.S.-based Rockwell Automation, France’s Schneider Electric, and Germany’s Siemens. (Reuters)

Another reminder as to why every investor portfolio should have exposure to cybersecurity. It also sets up quarterly results after today’s market close from CrowdStrike (CRWD). In those results, we will be interested in what is said about bad actors using AI to accelerate cyberattacks and how CrowdStrike is scaling its AI security portfolio.

7. Economic data today per TipRanks: Personal Income & Spending (July), PCE Price Index (July), GDP (Q2 2026, second estimate), Durable Orders (July), EIA Crude Oil Inventories (Weekly).

8. Companies reporting today per TipRanks: AM – Abercrombie & Fitch (ANF), Bath & Body Works (BBWI), Dycom (DY), J.M. Smucker (SJM), Kohl’s (KSS), Williams-Sonoma (WSM). PM – Agilent (A), CrowdStrike (CRWD), HP (HPQ), Nvidia (NVDA), Okta (OKTA), Salesforce (CRM), Synopsys (SNPS), Urban Outfitters (URBN).

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At the time of publication, TheStreet Pro Portfolio was long META and NVDA.