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25.08.2025 09:34 AM
Nvidia's financial results, set to be released on Wednesday, have become the focal point of Wall Street's attention. Investors see them not just as a report from a semiconductor giant but as a stress test for the entire artificial intelligence market, which has been expanding rapidly over the past two years.
After an impressive rally, shares of leading IT companies lost around 1.6% over the week. However, on Friday, gains resumed following comments from Fed Chair Jerome Powell, who hinted at imminent monetary easing and a possible rate cut.
California-based Nvidia has long become the prime beneficiary of explosive demand for AI solutions. Its graphic processors have effectively become the industry standard. In July, the company became the first in history to reach a market capitalization of more than 4 trillion dollars.
Since October 2022, Nvidia's share price has surged more than 1400%, with another 30% added since the beginning of 2025. Interest in the company is driven not only by faith in AI but also by the rapid expansion of adjacent industries, from power producers to cooling system developers for data centers.
According to Goldman Sachs, the largest technology corporations — Nvidia, Apple, and Microsoft — remain the key drivers of corporate earnings in the United States. Their results define the trajectory of equity indices.
In the coming week, investors will closely examine not only Nvidia's report but also fresh data on the US economy: inflation levels and consumer sentiment figures. These indicators will help determine how sustainable the current stock market rally is.
Despite some weakness in technology stocks, the US equity market ended the week in positive territory. The S&P 500 has gained around 10% since the start of the year and reached a historic high. The Dow Jones also closed at a record level on Friday, confirming investor confidence in the strength of the US economy.
After an extended rally in the technology sector, some market participants shifted their attention to other areas. Companies in healthcare and consumer goods, which had previously delivered more modest results, have moved into the spotlight.
Asian exchanges showed gains on Monday. Investors are cautiously pricing in a potential restart of the Fed's rate-cut cycle in the United States. Many, however, tie these expectations to Nvidia's upcoming earnings, which should validate the elevated valuations of the entire artificial intelligence sector.
Statements from Federal Reserve Chair Jerome Powell strengthened conviction that the Fed may lower interest rates by a quarter-point as soon as September. Futures imply an 84% probability of such a move. By mid-2026, markets are pricing in a more extensive easing cycle, with rates expected to fall to the 3.25-3.5% range.
This shift in expectations pushed US Treasury yields lower and weakened the dollar. While this improved the outlook for corporate earnings, it also highlighted concerns about potential deterioration in the labor market and the broader economy.
Any unexpected acceleration in inflation could sharply alter the situation. This would threaten the rally in long-term bonds, especially given the large $183 billion government debt issuance scheduled for this week.
On Monday, investor attention is focused on the speech by Federal Reserve Bank of New York President John Williams. Traders aim to assess how closely his stance aligns with recent comments from Fed Chair Jerome Powell on future monetary policy.
Regional equity markets began the week higher. Japan's Nikkei gained 0.6 percent, South Korea's Kospi rose by 0.7 percent, and Australia's ASX 200 strengthened by 0.4 percent.
The broad MSCI index for Asia-Pacific excluding Japan rose by 1.1 percent, driven mainly by Chinese blue chips, which advanced by 1 percent. Since the start of the month, the index has gained nearly 9 percent, climbing to levels last seen in October of last year. However, analysts warn that after such a rally, the likelihood of a correction is high.
Futures on the EUROSTOXX 50 and Germany's DAX fell by 0.2 percent on Monday. US indices S&P 500 and Nasdaq slipped by 0.1 percent in electronic trading after posting gains on Friday.
Investors are awaiting new details on potential chip supplies to China and on the agreement between Beijing and President Donald Trump, under which the Asian manufacturer will be required to transfer 15 percent of revenue from sales of certain advanced semiconductors to the US budget.
On Friday, Trump also announced that the US government is acquiring a 9.9 percent stake in Intel for 8.9 billion dollars. The deal price was 20.47 dollars per share, nearly 4 dollars below the market close, when the company's stock traded at 24.80 dollars.
In currency markets, the dollar is holding near 147.38 yen. This follows a roughly 1 percent decline on Friday, retreating from a peak of 148.77. The euro also regained ground, rising to 1.1698 dollars from Friday's low of 1.1583.
Experts expect the European Central Bank to leave key rates unchanged next month. However, according to sources, the issue of an additional cut may resurface in the autumn if economic activity in the region continues to weaken.
The decline in the US currency supported commodity assets. Gold prices reached 3365 dollars per ounce, consolidating after a 1 percent rise at the end of last week.
In energy markets, prices are also showing cautious growth. Brent gained and held at 67.77 dollars per barrel. US crude rose by 0.1 percent to reach 63.78 dollars.
