All Eyes on Nvidia as Earnings Loom After Close

Nvidia, which makes up nearly 8% of the S&P 500 by market cap, reports after the close. Stocks flattened and Treasury yields rose early today as Fed independence remains in focus.
August 27, 2025Joe Mazzola
Schwab Market Update

Published as of: August 27, 2025, 9:09 a.m. ET

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The marketsLast priceChange% change
S&P 500® index

6,465.94

+26.62

+0.41%

Dow Jones Industrial Average®

45,418.07

+135.60

+0.30%

Nasdaq Composite®

21,544.27

+94.98

+0.44%

10-year Treasury yield

4.29%

+0.03

--
U.S. Dollar Index

98.63

+0.41

+0.42%

Cboe Volatility Index®14.93
+0.31

+2.12%

WTI Crude Oil

$63.47

+$0.22

+0.35%

Bitcoin

$111,210

-$20

-0.02%

Disclosure

Major index values are as of Tuesday's close; others are as of 8:44 a.m. ET.

(Wednesday market open) Major indexes flattened awaiting today's main event: chip giant Nvidia's (NVDA) earnings after the close. Trading could be a sideways affair with investors fixated on the coming numbers. Nvidia has beaten Wall Street's earnings estimates 11 of the last 12 quarters, though shares fell four of those times, according to FactSet.

Federal Reserve independence remains on the front burner after yesterday's attempt by President Trump to fire Fed Governor Lisa Cook and Cook's refusal to step down. "Our view is that any move by the administration to influence the Fed erodes confidence in it as an institution and raises concerns among investors," said Kathy Jones, chief fixed income strategist at Schwab. It also could push longer-term yields higher by spiking inflation worries. Both the Fed and Trump have vowed to abide by whatever the courts decide.

Major indexes climbed yesterday as Nvidia rallied and Treasury yields slipped following solid demand for a 2-year note auction. But other news was thin aside from U.S. tariffs rising to 50% on imports from India, a move Trump made to punish the country for importing Russian oil. The tariff doesn't affect Apple's (AAPL) exports to the U.S. from India, which accounts for more than one-fifth of global iPhone production, Bloomberg reported.

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Three things to watch

  1. AI spending watched as Nvidia reports: Nvidia's earnings offer a chance for investors to glean whether the heavy spending each quarter by so-called "hyperscaler" cloud providers like Microsoft (MSFT), Meta Platforms (META), and Alphabet (GOOGL) is getting transferred into Nvidia's vault and what trends the company sees moving ahead. The hyperscaler spending has been unprecedented and provides solid evidence of AI's usefulness for these big cloud providers as they ramp up their data center networks, but most observers think it will slow at some point. When is uncertain, but Nvidia may have insight. This year, Meta alone intends to spend up to $72 billion on AI infrastructure, and Alphabet recently raised its 2025 capital spending forecast by $10 billion to $85 billion. Even when cloud spending diminishes, Nvidia won't necessarily be left behind. Nvidia's recent record highs partially reflected Tesla's (TSLA) decision to disband its Dojo supercomputing team and associated in-house training chips and rely more on hardware from Nvidia and Advanced Micro Devices (AMD), Barron's reported.
     
  2. Widespread impact seen when Nvidia reports: 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. That puts a lot of weight on Nvidia's results to set direction for the entire market starting in pre-market trading tonight. Analysts expect Nvidia's total revenue to be just over $46 billion, and whether and by how much Nvidia exceeds that could be key to the stock's reaction. Other shares that could be directly affected by Nvidia's results include competitors Advanced Micro Devices (AMD) and Broadcom (AVGO). Also, Taiwan Semiconductor Manufacturing (TSM), which makes chips for Nvidia, would likely see an impact if Nvidia warned of any slowdown in chip demand. Another issue that could move shares is whether Nvidia will forecast any sales of AI chips in China for the current quarter after recently being allowed back into that market but facing resistance from Beijing.
     
  3. Price tracker ahead: The next look at inflation is Friday's Personal Consumption Expenditures (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. Assuming PCE doesn't surprise, the August jobs report due September 5 likely becomes the biggest factor for the Fed ahead of its mid-September meeting. There are some forecasts for jobs growth to pick up after July's bearish surprise, but more weakness in the August data might bring back ideas of a possible 50-basis point Fed rate cut in September. That's not the base case, but a very weak jobs report might generate calls for such a move. Odds of a September rate cut reached 87% today, according to the CME FedWatch Tool, up slightly from earlier in the week. "While a September rate cut seems very likely, further cuts will depend on the labor market," my colleague Kathy Jones said. New York Fed President John Williams told CNBC this morning that if data moves as he expects, it would be appropriate to lower rates over time. Tomorrow features remarks from Fed Governor Christopher Waller, one of two policy makers who voted to reduce rates in July.

On the move

  • Kohl's (KSS) popped 17% ahead of the open after the retailer beat Wall Street's earnings and revenue expectations and increased guidance. Still, revenue fell year over year and the company still expects a net sales decrease for the fiscal year.
     
  • Eli Lilly (LLY) climbed 1% in pre-market trading after an upgrade to Hold from Reduce by HSBC, which cited the company's successful trial in diabesity, or the combined impact of obesity and Type 2 diabetes.
     
  • MongoDB (MDB) soared 30% ahead of the open after earnings from the database software firm topped analysts' expectations and the company raised guidance.
     
  • Kripy Kreme (DNUT) fell more than 7% early Wednesday on a downgrade to Underweight from Neutral by JPMorgan Chase, which cited a canceled partnership with McDonald's (MCD).
     
  • Cracker Barrel (CBRL) climbed nearly 5% after it said it would bring back its old logo after facing criticism over the new one.
     
  • Shares of AI cloud computing firm CoreWeave (CRWV) climbed more than 2% ahead of the open after Cantor Fitzgerald initiated coverage with an Overweight rating, saying it should benefit from secular growth trends in AI.
     
  • Okta (OKTA) climbed nearly 4% in pre-market trading after the maker of identity software topped analysts' quarterly expectations and raised its forecast.
     
  • Abercrombie & Fitch (ANF) fell almost 1% despite quarterly earnings and revenue topping analysts' estimates. The company also raised its annual sales forecast.
     
  • GE Vernova (GEV) and Lockheed Martin (LMT) were two of yesterday's leaders as cyclical companies that often do well in a growing economy again gained ground and the Trump administration raised the possibility of the U.S. government taking a stake in defense industry shares.
     
  • Canada Goose (GOOS) jumped 16.5% ahead of the open after CNBC reported the company has received bids to be taken private.
     
  • Treasury yields rose slightly after falling across most of the curve yesterday. Foreign interest in Tuesday's $69 billion two-year note auction was below average, Briefing.com noted, possibly significant considering renewed concerns about demand for U.S. assets after Trump tried to fire Cook.
     
  • Market breadth—which tracks the market's trends in strength and weakness—remains high as 61% of S&P 500 stocks trade above their respective 200-day moving averages. That's near the year's peak.

More insights from Schwab

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Trading in your retirement account: It may not be for everyone, but there are some important factors to consider if you plan to pursue this strategy.

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Chart of the day

Ether futures are up sharply in recent weeks and posted an all-time closing high above $4,800 Friday. Bitcoin futures have edged lower over the last two weeks and early this week fell below $110,000 intraday for the first time since July 9.

Data source: S&P Dow Jones Indices, Nasdaq. Chart source: thinkorswim® platform.

Past performance is no guarantee of future results.
For illustrative purposes only.

Checking the rolling 30-day correlation between ether futures (/ETH—purple line) and bitcoin futures (/BTC—candlesticks) prices, the relationship between the two digital assets has become more volatile this year.  They once again have reached an extreme level last seen in early February when the rolling 30-day correlation (red line in chart below) approached 0. Over the next two-month period following that, from February 4 to April 9, /BTC and /ETH dropped 29% and 53%, respectively. April 9 also happens to be the date that /ETH registered its 52-week low price of $1,387. Since then, /BTC has rallied 47% while /ETH is up over 225%.

The week ahead

Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.

August 28: Second quarter GDP second estimate and expected earnings from Dell (DELL), Marvell Technology (MRVL), Autodesk (ADSK), Ulta Beauty (ULTA), Gap (GAP), and Petco (WOOF).
August 29: July PCE prices, July core PCE prices, July personal spending, July personal income, University of Michigan final August Consumer Sentiment, and expected earnings from Alibaba (BABA).
September 1: U.S. markets closed for Labor Day holiday.
September 2: August ISM Manufacturing PMI®, July construction spending, and expected earnings from Nio (NIO) and Signet Jewelers (SIG).
September 3: July Job Openings and Labor Turnover Survey (JOLTS), July factory orders, and expected earnings from Dollar Tree (DLTR), Macy's (M), Campbell Soup (CPB), Salesforce (CRM), Hewlett Packard Enterprise (HPE), and American Eagle Outfitters (AEO). 

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