Last Updated: August 28, 2025
Market Snapshot
U.S. equity markets are pointing towards a mixed open as investors digest a pivotal earnings report from AI bellwether Nvidia and anticipate key economic data. Futures for the Dow Jones Industrial Average are in positive territory, suggesting strength in more traditional sectors, while Nasdaq futures are slightly lower, weighed down by a post-earnings dip in Nvidia. The market narrative is one of cautious optimism, balancing the robust, ongoing demand for artificial intelligence infrastructure against concerns about peak growth and the broader economic trajectory. Today’s release of the second estimate for Q2 GDP and weekly jobless claims will be critical in shaping the market’s direction and influencing the Federal Reserve’s policy outlook.
Key Market Drivers
- Nvidia’s Earnings Report: While Nvidia (NVDA) beat earnings and revenue expectations, its stock is trading lower in the pre-market. The slight miss on data center revenue and a cautious outlook on sales to China are prompting some profit-taking after a significant run-up in the stock, creating a drag on the tech sector.
- Upcoming Economic Data: The second estimate of Q2 GDP and weekly jobless claims are scheduled for release today. The consensus forecast for GDP is a slight downward revision, while jobless claims are expected to remain stable. Any significant deviation from these expectations could sway market sentiment regarding the health of the economy and the path of inflation.
- Strong Earnings from Other Tech Companies: Positive earnings reports from companies like Pure Storage (PSTG) and Snowflake (SNOW) are providing a partial offset to the negativity surrounding Nvidia. These strong results indicate healthy enterprise spending and continued adoption of cloud and data analytics technologies.
- Analyst Ratings and Corporate News: A downgrade of Krispy Kreme (DNUT) is weighing on the stock, while positive clinical trial results are boosting Eli Lilly (LLY). These individual company stories are contributing to a mixed pre-market landscape.
Upcoming Session Outlook
Directional Bias: Neutral/Sideways
Nvidia’s Mixed Reaction: Despite delivering quarterly earnings and revenue that surpassed Wall Street’s lofty expectations, Nvidia’s stock is trading lower pre-market. Investors are focusing on a slight miss in the critical data center segment and a cautious outlook on China sales, prompting profit-taking after the stock’s massive rally. This is casting a shadow over the entire semiconductor industry.
Spotlight on Enterprise Tech: Providing a counter-narrative to the Nvidia dip, strong earnings from Pure Storage (PSTG) and Snowflake (SNOW) are highlighting robust health in enterprise spending. The positive results suggest that demand for cloud infrastructure and data analytics remains strong, offering a bright spot within the technology sector.
Sectors to Watch:
- Semiconductors: This sector will be in the spotlight following Nvidia’s report. While NVDA itself may see pressure, other chipmakers could see varied reactions as investors reassess valuations and growth prospects across the industry.
- Software and Cloud Computing: Strong earnings from Pure Storage and Snowflake indicate continued strength in enterprise software and cloud services. These sectors may see continued investor interest as they are still demonstrating robust growth.
Potential Volatility Catalyst: The release of the second estimate for Q2 GDP and the weekly jobless claims data at 8:30 AM EDT is the most significant potential volatility catalyst. A weaker-than-expected GDP reading or a spike in jobless claims could reignite recession fears and lead to a broader market sell-off. Conversely, stronger data could bolster confidence in the economy and support a risk-on sentiment.
Confidence Level: Medium – The conflicting signals from Nvidia’s earnings and the broader pre-market strength in Dow futures, combined with the uncertainty surrounding the upcoming economic data, warrant a medium confidence level. The market’s reaction to the economic releases will be crucial in determining the day’s trend.
Morning Market Movers
Trading Higher
- Pure Storage, Inc. (PSTG): Trading significantly higher after reporting second-quarter earnings and revenue that beat analyst expectations. The company’s strong performance and positive outlook are being well-received by investors.
- Snowflake Inc. (SNOW): Shares are up in pre-market trading after the company reported strong second-quarter results and issued upbeat guidance. The company highlighted strong momentum in its AI-related offerings.
- Eli Lilly and Company (LLY): Gaining ground after announcing positive results from a clinical trial for its weight-loss drug.
Trading Lower
- Nvidia Corporation (NVDA): Trading lower despite beating quarterly earnings and revenue estimates. A slight miss in data center revenue and a cautious outlook on China sales are leading to some pre-market selling.
- Li Auto Inc. (LI): Shares are down ahead of the company’s second-quarter earnings report, which is scheduled for release before the market opens.
- HP Inc. (HPQ): Experiencing a slight dip in pre-market trading despite reporting third-quarter results that were generally in line with or slightly better than expectations.
- Krispy Kreme, Inc. (DNUT): Shares are falling after being downgraded by analysts.
Disclaimer: This analysis is based on publicly available information and is for informational purposes only. It does not constitute financial advice. Market conditions are dynamic, and predictions are inherently uncertain.
