New tariffs on India highlight growing global trade and geopolitical tensions
It was a quiet day for stocks. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average were all up 0.4% or less. The only index to show a slightly bigger gain was the Russell 2000, which gained 0.8%. However, as we enter the back half of the week, there is more data that may give stocks reason to close out August with more action.
After the close tonight, it's the event we've all been waiting for. More details on how Travis Kelce proposed to Taylor Swift. Or, perhaps Nvidia earnings. To each their own.
If you had to put a face on Artificial Intelligence (AI), Jensen Huang would be a leading candidate. The CEO of Nvidia has led the company to astronomical heights behind their AI chips. Analysts are expecting another record quarter from the company for both revenues and operating income. Not only will this number be important, but two other things I'm interested in hearing about are forward guidance as well as the impact of tariffs on that guidance. Recently, China ordered companies to discontinue orders for Nvidia's H20 chip because of security concerns. Nvidia also entered into an agreement by which it will pay the U.S. government a 15% export license for sales to China. There are a lot of moving parts here, so I want to know how Nvidia ultimately sees this shaking out. Based on the options market, the expected move after earnings is 6% which is the narrowest expected move for the stock after earnings in two years.
Also reporting tonight after the close is CrowdStrike. Shares of the cybersecurity company have fallen 20% since the beginning of the summer. The expected move following earnings is around 17%.
Shares of Kohl's are indicated higher by 15% in premarket trading. The retailer reported earnings this morning that beat on both the top and bottom lines. The company has been in the midst of a turnaround that seems to be resonating with customers. Management also narrowed their full-year sales guidance toward the higher end of their range.
One other individual company making news is Apple. The company sent out invitations on Tuesday for a September 9 event. The company is expected to unveil new iPhones, including an ultra-thin model. A new Ultra Watch is also anticipated as well as a host of upgrades to existing products. Shares of Apple have rallied 14% since the beginning of August.
There is more tariff news this mornings as well. President Trump announced a 50% tariff on goods imported from India. Half of those tariffs are retaliatory for India's continued purchasing of Russian oil. The 50% levy is scheduled begin today.
For today, I'll be watching how Nvidia trades into earnings. But I'm also going to be watching overall market volatility as the day progresses. Nvidia currently accounts for 8% of the S&P 500. Therefore, with volatility below 15 in premarket, I would not be surprised to see volatility tick up some in anticipation of tonight's news. As always, I would stick with your investing plan and long-term objectives.