Semicon rally on NVDA good results today ?
To say that it is easy to predict how US market will fare nowadays is a misnomer.
Seems like the “fear” over tariffs seems to be waning because so far, there is no actual signing of any trade agreement between US and the 59 countries (including Canada & Mexico) it has imposed reciprocal tariffs on.
Also, Trump’s “3 steps forward, 2 steps back” stunt towards US tariffs has lost its effect.
Recent EU 50% tariffs is a salient example. Less than 2 days after announcing a 50% tariff, it was pushed back for a month.
And just like that, US stock market has enjoyed a strong rally and mild pullback, driven by several factors. (see below)
Consumer Confidence Report
On 27 May 2025 morning, the Conference Board released its latest Consumer Confidence Index for May 2025. (see above)
The May index rose +12.3 points to 98, up from April’s 85.7, its lowest reading since May 2020.
Proportion of consumers surveyed said they think a US recession is coming in the next 12 months has also declined from April 2025.
And a measure of Americans’ short-term expectations for their (a) income, (b) business conditions and (c) the job market jumped +17.4 points to 72.8.
However, it is still below 80, that could signal a recession ahead.
Still market took the readings in the “right” stride and ran with it, resulting in a rally.
However, jittery returned on Wed, 28 May 2025 as markets waited with abated breath for $NVIDIA(NVDA)$ quarterly earnings to be released after market close.
By the time 4pm came around:
-
DJIA: -0.58% (-244.95 TO 42,098.70).
-
S&P 500: -0.56% (-32.99 TO 5,888.55).
-
Nasdaq: -0.51% (-98.23 to 19,100.94). 1,448 stocks rose and 2,960 fell as declining issues outnumbered advancers by a 2.04-to-1 ratio.
Wednesday trading volume on US exchanges was 15.60 billion shares, compared with 17.7 billion average for the full session over the last 20 trading days, likely implying reduced market interest or participation, as the wait for Nvidia’s earnings persisted.
May FOMC Minutes of Meeting.
Wednesday also saw the release of US central bank’s FOMC May 2025 minutes of meeting.
Its slightly “hawkish” tone could have been a catalyst that set off marginal pullback in the market.
According to minutes of the May 6-7 session:
-
FOMC concur that they could face "difficult tradeoffs" in coming months.
-
This will be in the form of (a) rising inflation, alongside (b) rising unemployment.
-
An outlook buttressed by concerns about financial market volatility and Fed staff warnings of increasing recession risk.
-
The team also acknowledged volatility in bond markets in the weeks before "warranted monitoring" as it could be a possible risk to financial stability.
-
They also noted that a change in the US dollar's safe-haven status, along with rising Treasury bond yields, "could have long-lasting implications for the economy."
-
The only certainty is US central bank will continue to be effectively sidelined until the Trump administration finalizes its tariff plans and with that, the impact on US economy becomes clearer.
-
Until then, the Fed decided to hold the benchmark policy rate steady in the 4.25% - 4.5% range and adopts a “wait & see” stance.
Lastest CME Fedwatch tool for impending June 2025 FOMC meeting puts interest rate remaining status quo in the 4.25% - 4.5% range at 97.7%.
NVDA’s Earnings.
The quarterly earnings that US market was waiting (the whole day) for was eventually released.
As per LSEG estimates:
-
Revenue: surged to $44.1 billion vs $43.31 expected vs Q1 2025’s $26 billion This marked a +69% YoY gain.
-
Earnings per share (adjusted): came in at $0.96 vs $0.93 expected vs Q1 2025’s $6.12 (pre 10-for-1 stock split). This is a +56.86% YoY gain.
-
Net income: was $18.8 billion vs Q1 2025’s $14.9 billion, recording a +26.17% YoY gain.
-
Gross margin: was 61% or 71.3% (exclude H20 charge) vs Q1 2025’s 78.4%,
The good results came even though Nvidia took a $4.5 billion loss because US export restrictions prevented Nvidia from selling its customize H20 chip to China.
Quarter Guidance / Outlook.
-
For Q2 2025, Nvidia revenue guidance was $45 billion vs LSEG estimates of $45.9 billion, registering a marginal decline.
-
Revenue guidance would have been $8 billion higher if US government did not restrict H20 chips sales to China.
US Market - 29 May 2025.
On Wednesday post earnings announcement, NVDA rose by +4%.
On Thu, 29 May 2025, US pre-market indicators are showing strong signs of rally. (see below)
On Wed, 28 May 2025, $SPDR S&P Semiconductor ETF(XSD)$ closed down -1.2% at $227.51 on lighter volume.
Pre-market readings for Thu, 29 May 2025, showed a strong rebound, with XSD indicated up over +4% following Nvidia’s upbeat earnings and positive sentiment across semiconductor stocks. (see below)
Besides Nvidia’s positive earnings, there is another news just out that will help propel US market higher on Thursday. (see below)
On Wednesday (US time), the 3-judge panel at New York-based US Court of International Trade, over- ruled Trump from putting broad tariffs on imports using emergency powers.
The decision put Trump’s main economic policy in question—a policy that had shaken global markets, upset trade partners, and raised worries about rising inflation and a weaker economy.
With this ruling, immediately Trump may no longer be able to use tariffs to influence the world economy as he wanted, because he now needs approval from Congress.
It’s also unclear if the White House will stop all emergency tariffs while they decide what to do next.
What Trump will do next is anyone’s guess.
But for now, US market will rejoice. Que sera sera.
Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.
-
Do you think with its earnings out, Nvidia will be able to do a U-turn and break above 0% YTD gain?
-
Do you think Trump will find other tariffs (within US president’s power) to apply and enact worldwide?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Pls "Re-post" so that more get to know. Tks! Rating is important (to me).
Consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!!