Nvidia beats but the stock drops 10%

Nvidia Beats But The Stock Drops 10% – Since the start of the week, volatility and volume have been on the decline as investors and traders awaited Nvidia’s earnings report, which they believed would be key for the next move. Nvidia Corp. failed to live up to investor hopes with its latest results on Wednesday, delivering an underwhelming forecast and news of production snags with its much-awaited Blackwell chips.

The company’s quarterly report — the most anticipated part of the tech industry’s earnings season — met or beat analysts’ estimates on nearly every measure. But Nvidia investors have grown accustomed to blowout quarters, and the latest numbers didn’t qualify. 

Moreover, Nvidia’s next big cash cow — the new Blackwell processor lineup — has proven more challenging to manufacture than anticipated. The product is the next generation of the company’s dominant artificial intelligence processor, and fears of delays contributed to a stock decline of as much as 8.4% in late trading. The shares had more than doubled this year through Wednesday’s close, following a gain of 239% in 2023. 

Eyes on US data today

The upcoming US economic releases are expected to significantly influence the markets, depending on any surprising data. The second estimate for Q2 GDP is anticipated to stay at 2.8%. However, recent economic activities indicate that a downward revision is more probable.

The upcoming Jobless Claims report will be closely watched, especially to see if the number of claims remains high. Even if the GDP surprises with good news, if the jobless claims remain disappointing, it will outweigh the positive data and keep concerns about the labor market high.

DXY bounced off key support

The US Dollar Index has rebounded from its solid support area of 100.60 – 101.00, which has been intact since February 2023. The technical indicators were heavily oversold on the daily chart after the recent selloff. The current bounce is considered to be another short-term retracement before the downside trend resumes.

The next resistance levels to watch are 101.50 and 101.80. The bearish outlook remains as long as the index trades below 102.50.

EURUSD below 1.11

EURUSD has declined after reaching 1.12 earlier this week. The technical indicators were heavily overbought, leading to a short-term retracement before the upward trend resumes. The currency pair declined and reached as low as 1.1070 by the time this report was released.

In the meantime, the weekly close remains the most significant factor to keep an eye on, specifically at 1.1050. This level has been a strong resistance since 2022; however, last week, the pair managed to close above it, turning it into a solid support. Additionally, this level coincides with the 200-week moving average, therefore any downside retracement should be limited around that area.

Gold remains above $2500

Yesterday, the price of Gold dropped by approximately $25 per ounce then bounced back to around $2516 earlier today, after testing the psychological support level of $2500. Technical indicators suggest that the market remains bullish across different timeframes and is not yet overbought, supporting a positive outlook for now.

The next resistance area is currently around $2525. A break above this resistance would likely lead to further gains, potentially pushing the price to a new record above $2531. On the downside, if the price breaks below $2500, it could signal a deeper correction, possibly down to around $2478.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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