Comeback Trail: Losses Fade as Nvidia Reassessed

Published as of: August 28, 2025, 9:14 a.m. ET

(Thursday market open) Stocks clawed back from overnight losses to post slight early gains, but some tech shares remain red on pressure from Nvidia (NVDA). The chip giant's earnings, revenue, and guidance all topped estimates, but crucial data center growth fell short of consensus and overall numbers didn't blow away expectations the way investors grew used to recently. Still, shares are well off their lows, helped by upbeat comments on the company's call and guidance that looked conservative because it didn't include any sales to China.

With Nvidia in the books, focus shifts toward tomorrow's July Personal Consumption Expenditures (PCE) price index, the Federal Reserve's favored inflation reading. Though data could reflect consumer and producer prices assessed already, any surprise might shape September's Fed decision. Analysts expect headline PCE up 0.2% and core PCE—which excludes food and energy—up 0.3%. Today, the government's updated estimate for second quarter gross domestic product (GDP) rose to an annual rate of 3.3% from the initial 3%, and weekly initial jobless claims dropped 5,000 to 226,000 while continuing claims fell to 1.954 million. "First-time jobless claims edged down last week, but continuing claims stayed high," said Kathy Jones, chief fixed income strategist at Schwab. "Laid off workers are having a harder time finding a job."

Before Nvidia reported, the market flexed its muscles Wednesday with more than 70% of S&P 500 members advancing as that index posted a new record high close. Eight of 11 sectors climbed. Later today, stay tuned for more retail and tech earnings and remarks on the economic outlook from Fed Governor Christopher Waller, one of two policy makers who voted to cut rates in July.

1. Nvidia deeper dive: Shares of Nvidia slipped 0.3% ahead of the open after initially falling more than 3%. Data center revenue surged 56% last quarter but missed analysts' estimates by a sliver, and that appeared to be the main quibble investors had with results. Other metrics looked solid, though perhaps not as eye-popping as in the past thanks in part to the law of large numbers. Guidance of $54 billion in revenue for the current quarter represents more than 50% year-over-year growth, and the company authorized $60 billion in new share repurchases. Several Wall Street firms raised their target prices after earnings, with some penciling in possible sales of Nvidia's H20 chip in China. CEO Jensen Huang said the company's recently introduced Blackwell AI platform is "ramping at full speed and demand is extraordinary" and expects the largest data center firms to spend $3 trillion to $4 trillion over the coming half decade, reinforcing ideas that AI chip spending could stay healthy. Also this morning, the stock got a lift from a Fox Business report saying Nvidia is in talks with the Trump administration about allowing the Blackwell chip to be sold in China. Advanced Micro Devices (AMD), Broadcom (AVGO), Micron (MU), and Taiwan Semiconductor Manufacturing (TSM) were mixed after Nvidia reported, with Broadcom and Micron up while the others fell. TSM, which makes chips for Nvidia, was down 1.15%.
    
2. Yield curve still seen steepening: While growing hopes of a Fed rate cut next month could mean lower yields for the 2-year Treasury note and other shorter-term debt, the Fed doesn't control longer-term yields like the 10-year. Those could continue climbing in the short term based on heavy Treasury supplies and inflation fears. "We don't expect long-term yields to fall as much as short-term yields given sticky inflation, concerns around the fiscal outlook, and ongoing uncertainty around trade policy," said Collin Martin, director, fixed income strategy at the Schwab Center for Financial Research. "Long-term yields may need to stay elevated to attract potential buyers as our debt continues to grow." Additional steepening of the curve—which measures the gap between short- and long-term yields—has historically supported financial sector stocks, as it allows banks to borrow money at low rates and loan it out at higher ones. However, higher long-term yields don't bode so well for the housing market or for consumers and smaller firms that rely on borrowing. And personal consumption grew only about 1% annualized in the first half of 2025, below the 2.5% average of the last three years, my colleague Martin noted. This could eventually hurt corporate profits.
    
3. Retail traders calling the shots: Some of the stocks up most since the early-April lows show retail traders' fingerprints, including the so-called "meme" stocks, unprofitable tech firms, retail favorites, and heavily shorted stocks. "The retail trader lives, eats, and breathes this 'buy the dip' mentality and we've seen it in the outperformance of various baskets," said Liz Ann Sonders, chief investment strategist at Schwab, speaking on CNBC earlier this week. Dip buying still appears to have legs for now, judging by the charts and the amount of weekly exchange-traded fund (ETF) flows. It's lifted the major indexes many times over the last few months when they briefly touched their respective 20-day moving averages. Retail traders continue stepping in every chance they get. At times in the past, this indicated a near-term market top, but past isn't precedent.

• Dollar General (DG) bounced 6% ahead of the open after the retailer raised its annual financial targets, citing solid demand. Earnings beat estimates.
   
• CrowdStrike (CRWD) fell 2.75% in pre-market trading even as quarterly earnings and revenue both exceeded analysts' expectations, and third quarter earnings guidance topped consensus. Third quarter revenue guidance was below expectations, however.
   
• Urban Outfitters (URBN) fell 3.4% despite earnings beating analysts' estimates, revenue coming in above expectations and sales at stores open a year or more rising more than 5%.
   
• Best Buy (BBY) dropped nearly 4% ahead of the open even though the firm topped analysts' earnings estimates. Shares fell on disappointment that the firm didn't raise full-year guidance, Barron's reported.
   
• Snowflake (SNOW) soared 14% in pre-market trading after the cloud-based data storage company reported earnings that exceeded analysts' consensus.
   
• Five Below (FIVE) jumped 4% after the retailer topped analysts' average earnings estimate and saw comparable sales at stores open a year or more rise more than 12%. Guidance topped consensus.
   
• Pure Storage (PSTG) climbed 15% before the open after the tech company reported better-than-expected earnings.
   
• Cooper Companies (COO) plunged 16% as the medical device maker beat earnings expectations but offered disappointing guidance.
   
• The Nasdaq Bank Index (BANK) continued its recent tear Wednesday and is now up 8.6% for August. The steepening yield curve may be one factor, but banks may also be getting a lift from hopes for growth in borrowing demand if the Fed cuts rates next month.
   
• Bitcoin futures (/BTC) rose 1% this morning, continuing to revive from recent lows, while crypto-related stocks Circle Internet Group (CRCL), Strategy (MSTR), and Coinbase (COIN) all rose around 1%.
   
• Odds of a Fed rate cut next month stand at 88%, according to the CME FedWatch Tool. Worries about Fed independence after President Trump's attempted firing of Fed Gov. Lisa Cook remain in focus. "While the outcome is not likely to change the outcome of the September meeting, it is a negative for the long end of the curve," said my colleague Kathy Jones.

With one trading day left in August, a traditionally weak month for stocks, the S&P 500 index (SPX—candlesticks) is up 2.2% from the end of July and the tech-heavy Nasdaq-100^® (NDX—purple line) is up 1.5%. If both hold their gains through Friday, this would be the second consecutive year where the two indexes had positive August results, as seen on this two-year chart comparing the two.

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

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). 
September 4: August ADP Employment, August ISM Services PMI^®, and expected earnings from Ciena (CIEN), Broadcom (AVGO), and lululemon (LULU).