The Stock Market is Steady as Traders Shake Off Doubts About Nvidia

Global stocks shrugged off early weakness after Nvidia Corp.’s revenue forecast fell short of sky-high expectations, signaling that the powerful rally driving markets to record levels remains on track.

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Futures tied to the S&P 500 reversed initial declines, pointing to fresh gains from Wednesday’s all-time high close. European and Asian equities also managed to edge higher. In premarket trading, Nvidia slipped about 1.5%, standing out as the only member of the “Magnificent Seven” to trade lower.

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In the bond market, long-dated U.S. debt continued to recover, with 30-year Treasury yields dropping three basis points to 4.89%. European bonds rallied broadly, led by a rebound in French government notes. Meanwhile, the U.S. dollar extended its losing streak to a third straight day.

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Investors zeroed in on Nvidia’s results for clues about the sustainability of the artificial intelligence boom that has powered equity gains this year. While the company’s revenue outlook hinted at a cooling pace following two years of explosive growth, management countered concerns that demand for AI-related infrastructure is fading.

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Recent trade-related headwinds in China have pressured Nvidia, but any sign of renewed momentum there could provide an extra lift, according to Filip Andersson of Danske Bank A/S.
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“Any improvement in China would be purely additive to current projections,” Andersson wrote. “If it doesn’t materialize, this looks more like a one-off than a structural slowdown.” That perspective helped U.S. equity futures take the earnings news in stride.

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With Nvidia’s report effectively closing out earnings season, traders are now shifting their attention to the Federal Reserve’s upcoming policy meeting and key economic data releases that will shape expectations for interest rates. Adding to the mix is political uncertainty as markets track former President Donald Trump’s escalating confrontation with the Fed and potential attempts to influence its structure.

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On Thursday, investors will dissect weekly jobless claims and updated second-quarter GDP figures. Economists expect the revised report to confirm a pickup in personal consumption after a sluggish start to 2025.

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Looking ahead, Friday brings the core personal consumption expenditures (PCE) index the Fed’s preferred inflation measure which is projected to tick higher. That would underscore the challenge for policymakers trying to rein in prices without putting additional pressure on a labor market that is already showing signs of cooling.

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“The market has been overly confident about the number of Fed cuts currently priced in,” said Karen Georges, an equity fund manager at Ecofi. “If job data shows the labor market holding up better than expected, those expectations could be scaled back.”

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Outside the U.S., Japan’s two-year government bond auction drew softer demand compared to its 12-month average, highlighting caution among investors amid lingering speculation that the Bank of Japan could raise rates later this year.

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Meanwhile, in mainland China, investors sold a record HK$20.4 billion (about $2.6 billion) of Hong Kong-listed shares on Thursday. The move suggests that local investors are shifting back into domestic equities as a powerful rally gathers steam in China’s onshore markets.

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