US Stock Futures Mixed as Nvidia Slides Post Earnings; Nasdaq, S&P 500, & Dow in Focus

US Stock Futures Mixed as Nvidia Earnings Rattle Markets

Nvidia (NVDA) beats earnings and revenue but sends the Nasdaq 100 E-mini and S&P 500 E-mini lower in morning trading on Thursday, August 28. Why did Nvidia shares drop in after-hours trading?

Nvidia reported total revenue of $46.74 billion, rising 56% year-on-year and topping Wall Street estimates despite no H20 processor sales to China. However, data center revenue, although surging 56% year-on-year to $41.1 billion, fell short of analyst expectations.

Nvidia shares were down 3.14% to $175.9 in after-hours trading despite the earnings beat and positive outlook. Analysts also criticized the firm’s forward guidance.

David Scutt, APAC market analyst at StoneX, noted:

“Nvidia down afterhours because it sets a modest revenue forecast so it can beat it by +$2b in Q3. Seen this story how many times before now?”

The Nasdaq 100 E-mini and S&P 500 E-mini fell 50 points and 4 points, respectively.

Meanwhile, rising bets on a more dovish Fed policy stance cushioned the downside and lifted the Dow Jones E-mini, up 80 points.

Fed Rate Cut Bets and Fed Independence in Focus

According to the CME FedWatch Tool, the probability of a September Fed rate cut rose from 87.8% on August 26 to 88.7% on August 27. 10-year US Treasury yields extended their losses from Wednesday, supporting demand for risk assets. Lower rates make future earnings more valuable, boosting US futures markets.

Fed New York President John Williams commented on the Fed’s policy stance, stating:

“Every meeting is, from my perspective, live. Risks are more in balance. We are going to just have to see how the data play out.”

While Williams declined to comment on President Trump’s attempt to fire Fed Governor Lisa Cook, he did underscore the importance of Fed independence, stating:

“The structure of the Federal Reserve is…designed to have independent policymakers who are making decisions that affect the economy over the longer term, away from short-term political pressure. And I think that’s really, really important.”

US GDP, Jobless Claims, and Fed Speakers in Focus

Later today, US GDP and jobless claims data will face market scrutiny. Economists expect initial jobless claims to drop from 235k (week ending August 16) to 230k (week ending August 23). A lower claims reading may temper expectations of multiple Fed rate cuts, potentially weighing on risk assets. On the other hand, a spike in claims could signal aggressive rate cuts given the Fed’s concern about a cooling labor market.

According to preliminary data, the US economy expanded 3.1% quarter-on-quarter in Q2 after contracting 0.5% in the previous quarter. A higher GDP reading could cushion any downside from lower jobless claims data. However, a downward revision may revive stagflation fears if jobless claims spike, affecting market sentiment.

Beyond the earnings, FOMC members’ speeches will remain a focal point. Members’ views on the Fed rate path for the fourth quarter are likely to affect risk appetite.

Key Asian Market Movers

Asian markets were mixed in the Asian morning session on Thursday, August 28, as investors reacted to Nvidia’s earnings results.

The Hang Seng Tech Index slid 1.04%, leaving the Hang Seng Index down 0.67%. By contrast, Mainland China’s CSI 300 and the Shanghai Composite Index gained 0.63% and 0.02%, respectively. Investors brushed aside reports of Mexico planning to raise tariffs on Chinese goods. Expectations of fresh stimulus from Beijing and hopes for a US-China trade deal lifted sentiment.

The Nikkei 225 advanced 0.45% after USD/JPY briefly jumped to an overnight high of 148.185. A weaker Yen could boost overseas demand and corporate earnings, raising share prices. Gold reversed Wednesday’s gains, declining 0.19% to $3,390.

Looking ahead, investors should brace for heightened volatility. Friday’s US Personal Income and Outlays Report could raise stagflation risks if inflation accelerates. Additionally, economic data from Japan and China could influence sentiment.

Upbeat Japanese data (out on August 29) could fuel expectations of a Bank of Japan rate hike, potentially weighing on risk assets. Chinese economic data (out on August 27 and 31) and Beijing’s stimulus measures will affect risk appetite.

Technical Levels to Watch as US Data Takes Center Stage

Despite the mixed morning session, the broader short-term bias remains bullish, hinging on upcoming economic data and Fed guidance.

Dow

• Resistance: August 22 high of 45,841, 46,000, then 46,500.
• Support: 45,000, the August 21 low of 44,642, and the 50-day EMA (44,421).

Nasdaq

• Resistance: August 18 high of 23,882, 24,000, then 24,500.
• Support: 23,500, the 50-day EMA (23,055), and then the August 20 low of 23,035.

S&P 500

• Resistance: August 22 high of 6,496 and 6,750.
• Support: 6,450, the August 20 low of 6,363, and then the 50-day EMA (6,319).

Will US economic data and Fed speakers send US markets to record highs? The next week could prove pivotal. Follow our live coverage and consult our economic calendar.