NVDA & MU Growth Show SPX Concentration, Fed Readies for Jackson Hole

In an interview on Schwab Network, Charles Schwab Chief Investment Strategist Liz Ann Sonders highlighted significant earnings concentration within the S&P 500 index, driven predominantly by the artificial intelligence trade. According to Sonders, Nvidia (NVDA) and Micron Technology (MU) account for roughly 18% and 14% of the index's expected earnings growth for calendar year 2026, respectively, representing nearly one-third of total expected S&P 500 earnings growth combined. Beyond earnings concentration, the discussion focused on the macroeconomic landscape ahead of the Federal Reserve's Jackson Hole symposium. Markets are anticipating signals on the interest rate trajectory and inflation targets, though analysts expect limited forward guidance. Meanwhile, on Capitol Hill, legislative priorities include passing government funding legislation through December 11 to avoid a shutdown ahead of upcoming elections. Addressing market leadership, Sonders observed that the value-versus-growth dynamic remains widely misunderstood. Contrary to general perceptions, Russell 1000 Value has handily outperformed Russell 1000 Growth year-to-date with a 23% gain compared to Growth's 3%, continuing a two-year trend of relative strength.