August 27th, 2025
Markets hold steady as investors await NVIDIA results later today.
U.S. equities opened flat this morning as investors look ahead to NVIDIA’s second-quarter earnings after the close. The S&P 500 is hovering near record highs, while the Nasdaq remains about 1.3% below its peak earlier this month.
Overseas, trading was mixed: European indexes softened, Japan’s Nikkei edged higher, and Indian stocks fell 1% after the Trump administration doubled tariffs on imports from the country to 50%.
Economic Takeaways:
- In bonds, selling pressure in longer-dated Treasuries continues following President Trump’s move to oust Fed Governor Cook, with 30-year yields rising 3 basis points today. Shorter maturities remain steadier, and attention now turns to the upcoming 5-year auction as a gauge of demand.
- The dollar is firming after yesterday’s dip, while oil and gold prices are little changed.
- Reports suggest the Trump administration is exploring ways to exert influence over the appointment of regional Federal Reserve Bank presidents, who are currently selected by private-sector boards in coordination with the Fed Board of Governors.
- New York Fed President Williams said this morning that September should be considered a “live” meeting, reinforcing expectations for a rate cut. Investors will also be watching Governor Waller’s remarks tomorrow, as he is widely viewed as the leading candidate to succeed Chair Powell when his term expires next year.
- Market breadth remains strong, with 61% of S&P 500 stocks trading above their 200-day moving averages—near this year’s highs.
Nvidia Set to Close Out Big Tech Earnings With Q2 Results as Trade Policy Shifts Loom
Nvidia (NVDA) will cap off Big Tech’s earnings season when it reports second-quarter results after the close on Wednesday. The report comes against a backdrop of changing U.S. trade policy: President Trump revoked his earlier ban on Nvidia’s chip sales to China in July but imposed a 15% levy on those transactions in August. Nvidia had previously warned of an $8 billion hit to its Q2 results from the policy shift. The administration has also announced plans for a 100% tariff on semiconductor imports unless companies commit to U.S. manufacturing, though Nvidia is expected to be exempt.
Analysts expect Nvidia to post adjusted EPS of $1.01 on revenue of $46.2 billion, up 49% and 53% year over year, respectively. That compares with $0.68 EPS and $30 billion in revenue in the same quarter last year, when results were driven by a surge in AI demand. While growth has moderated since last year’s triple-digit gains, Evercore ISI’s Mark Lipacis believes expansion will bottom at 50%, potentially attracting fresh momentum investors. Data center revenue is forecast to reach $41.2 billion, with gaming revenue at $3.8 billion. Nvidia shares are up 35% year-to-date and more than 40% over the past 12 months, with the company briefly topping a $4 trillion market cap in July.
Beyond headline numbers, markets will be watching for commentary on China sales, the rollout of the GB200 super chip, and the upcoming Blackwell Ultra chip. Analysts at KeyBanc expect improving manufacturing yields to support full-year Grace Blackwell rack shipments of about 30,000, ahead of prior estimates. Nvidia’s leadership in AI continues to rest not only on its dominance in hyperscale data centers with partners such as Amazon, Microsoft, and Google, but also on its longstanding collaboration with academic researchers—a strategy CEO Jensen Huang began cultivating more than a decade ago that helped propel Nvidia to the forefront of the AI revolution.
On the Move
- Kohl’s (KSS) jumped 17% pre-market after beating earnings and revenue estimates and raising guidance, though sales declined year over year and management still expects a full-year net sales drop.
- Eli Lilly (LLY) gained 1% after HSBC upgraded the stock to Hold from Reduce, citing progress in its “diabesity” trial addressing obesity and Type 2 diabetes.
- MongoDB (MDB) surged 30% after delivering stronger-than-expected results and lifting guidance.
- Krispy Kreme (DNUT) slid more than 7% after JPMorgan downgraded the stock to Underweight from Neutral, citing the termination of its partnership with McDonald’s (MCD).
- Cracker Barrel (CBRL) rose nearly 5% after announcing it will restore its old logo following backlash over a recent redesign.
- CoreWeave (CRWV) advanced more than 2% after Cantor Fitzgerald initiated coverage with an Overweight rating, pointing to secular growth tailwinds in AI.
- Okta (OKTA) climbed nearly 4% after topping quarterly estimates and raising its outlook.
- Abercrombie & Fitch (ANF) dipped about 1% despite beating earnings and revenue forecasts and raising annual sales guidance.
- GE Vernova (GEV) and Lockheed Martin (LMT) were among yesterday’s leaders, lifted by optimism in cyclical names and speculation the Trump administration may consider taking stakes in defense firms.
- Canada Goose (GOOS) rallied 16.5% on reports from CNBC that the retailer has received bids to go private.
What’s Ahead
All eyes on NVIDIA earnings after the bell today– Options trading in NVIDIA has surged to its highest level in three months, underscoring investor focus on the company’s quarterly results due after the bell.
Analysts are looking for earnings of $1.01 per share, which would mark nearly 50% growth from a year ago. Beyond earnings, markets will be focused on the company’s revenue and outlook as a key test of sustained demand for artificial intelligence—a theme that has powered gains in technology and AI-linked stocks throughout the year.
Nvidia accounts for about 8% of the S&P 500 index’s total value and could move 6% one way or the other after earnings, according to options trading.
The next look at inflation is Friday’s PCE price index for July. There might not be much shock value because many inputs come from Consumer Price Index (CPI) and Producer Price Index (PPI) reports. Analysts expect a 0.2% increase in headline PCE and 0.3% in core PCE, which excludes food and energy.
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