Nasdaq 100 and S&P500: Nvidia Drops, But AI Buzz and Fed Bets Keep US Stocks Afloat

Nasdaq Inches Up as Nvidia Cools, China Tensions Cloud Outlook

The Nasdaq ticked higher in midday trading Thursday, but gains were capped as Nvidia’s shares pulled back following cautious guidance that excluded potential China sales. The broader market saw a mild lift from strong corporate earnings and firming expectations of a September rate cut, yet tech sentiment remained sensitive with chip stocks in the spotlight.

What’s weighing on Nvidia despite upbeat forecasts?

Look, Nvidia’s quarter wasn’t bad — revenue came in hot, the company is pushing a $60 billion buyback, and CEO Jensen Huang sounded pretty bullish on AI demand. But here’s the thing: Nvidia chose to leave China out of its guidance. That spooked some traders, especially given how important China is to its business. Even with new licenses to sell its H20 chips in the region, it seems there’s still too much regulatory fog for them to confidently bank on Chinese sales.

Nvidia (NVDA) dropped about 1.3% in choppy trade, as some read between the lines and saw signs of caution, particularly around data center spending. Some analysts are wondering if cloud providers are starting to tap the brakes a bit. It doesn’t take a lot of imagination to see how that could weigh on the AI story if it continues.

How are chip stocks and big tech names responding?

There was a bit of a mixed bag here. Super Micro (SMCI) slipped 1.1%, maybe just following Nvidia’s lead. But Broadcom (AVGO) caught a bid — up 2.5% — after Oppenheimer hiked its price target. Snowflake (SNOW) was the real standout, rallying nearly 18% after raising long-term revenue guidance, leaning hard into the AI trend. HP (HPQ) also popped 2.4% on better-than-expected results and growing PC demand.

As for the broader tech sector, it was steady. The S&P tech index inched up 0.2%, and the SOX semiconductor index added 0.3%. Big-cap AI buyers like Microsoft and Meta barely moved the needle, both trading slightly higher.

Is the Fed setting the stage for a September cut?

That’s the other piece traders are watching. The S&P 500 continues to hang around record highs partly because of growing conviction that the Fed will finally ease off the brakes next month. Futures are pricing in nearly 89% odds of a rate cut in September, and the jobless claims number helped — fewer claims than expected, paired with a Q2 corporate profit rebound, made for a soft-landing kind of vibe.

But again, time will tell. Friday’s PCE inflation data is the next big piece. If inflation perks up, the Fed might hit pause. And don’t forget, Fed Governor Waller is set to speak later today — he’s considered a dove, so traders will be parsing every word.

What should traders be watching next?

We’re still in a market that wants to believe in AI and a soft landing. That’s why pullbacks, especially in tech, keep getting bought. But Nvidia’s China overhang is a reminder that not all clouds have cleared. For now, watch how the market digests PCE data tomorrow — that’s the key swing factor for the rate-cut story.

Bottom line: The Nasdaq’s drift higher feels like a market working off some excess. There’s still plenty of dip-buying appetite, but a hotter inflation read could test that resolve.

More Information in our Economic Calendar.