Market preview for the coming session
Equities enter the next trading session with mixed signals after the S&P 500 closed modestly higher in the prior session, up about 0.2 percent. Investor attention will remain tightly focused on corporate earnings and the industry-specific developments that are reshaping expectations for technology and consumer sectors. Two clear themes emerged from the latest slate of reports. First, Nvidia delivered another quarter of strong top-line growth but left the market with questions about near-term demand and geographic limitations. Second, several retailers offered upbeat guidance that suggests pockets of consumer spending remain healthy even as some packaged goods companies continue to struggle.
Nvidia reported revenue of $46.7 billion, up 56 percent versus a year earlier, and net income that rose 59 percent to $26.4 billion. Those year-over-year gains underscore the ongoing strength of the artificial intelligence economy and the critical role the company plays in the data center market. Yet the company is not expecting to sell any of its H20 chips to customers in China this quarter. That policy change follows an arrangement under which Nvidia had agreed to give the U.S. 15 percent of China sales of H20 in exchange for export allowances, and it appears Beijing has discouraged purchases over security concerns and complaints about downgraded specifications. Nvidia also forecast third quarter sales of roughly $54 billion, which matched the average Wall Street estimate but fell short of some more optimistic projections above $60 billion. Data center revenue was up 56 percent year over year to $41.1 billion, but sequential growth was only about 5 percent, a figure some market participants interpreted as an early sign of moderation in demand growth.
The immediate market reaction to Nvidia’s results was slightly negative. In after-hours trading the stock traded down roughly 2 to 4 percent as investors weighed strong absolute results against weaker-than-hopeful forward guidance and the absence of China H20 sales. Traders will be parsing management commentary on the earnings call for color about demand durability, inventory levels at large cloud providers, and whether geographic constraints will persist or be resolved in coming quarters. Nvidia headlines will likely influence the broader technology complex at the open, and any further weakness could drag on index performance given the company’s large market weight.
Not all corporate news pressured markets. Several retailers delivered upbeat updates that point to resilience in certain categories of consumer spending. Kohl’s raised its annual profit forecast and said new product assortments are beginning to attract shoppers. Although the company still reported comparative sales down 4.2 percent, management framed the results as evidence that strategic initiatives are starting to resonate with customers. Abercrombie & Fitch reported that its Hollister chain recorded 19 percent sales growth in the quarter, and the company cited strong summer and back-to-school demand as the driver of record second quarter sales. Williams Sonoma posted 3.7 percent comp sales growth for the quarter and reiterated operating margin guidance despite higher costs associated with tariffs. Together, these reports suggest that discretionary spending in apparel, home goods, and related categories is holding up better than some expected heading into the back-to-school season.
These divergent corporate stories create a nuanced opening for the market. Technology investors will remain sensitive to Nvidia’s outlook and any downward revisions that could ripple through chip-equipment and cloud names. At the same time, positive retail prints could support consumer discretionary stocks and offer a counterweight to weakness in parts of tech. Traders should be alert to sector rotation that could favor retail and select cyclicals if confidence in household spending remains intact.
There were also other items in the tape that could influence sentiment. J.M. Smucker shares dropped about 4.4 percent after the company reported declining sales across key categories including coffee, dog snacks, fruit spreads and sweet baked goods. That report underscores that consumer strength is uneven and that staples and packaged goods companies can still face demand headwinds even as apparel and specialty retailers show momentum. The contrast between Smucker and the stronger retail names reinforces the idea that durability of spending will vary by price point and category.
Labor and policy developments warrant attention as well. Workers at an EV battery plant in Kentucky that is a joint venture between Ford and SK On were voting on whether to join the United Auto Workers union, with results expected. The outcome could have implications for battery production timelines, cost structures and the broader electric vehicle supply chain. On the policy front, Treasury Secretary Scott Bessent said the administration has no plans to pursue a stake in Nvidia but does intend to invest in industrial companies. That statement signals a focus on traditional industry support rather than direct intervention in leading AI hardware providers.
Other corporate anecdotes may matter for niche sectors. Lego reported record sales, which could be an early sign of recovery for the toy industry and a positive datapoint for retail analysts who track discretionary categories. American Eagle announced a new celebrity sponsorship with Kansas City Chiefs tight end Travis Kelce, launching a limited product collaboration that ranges from vintage-inspired tees to cashmere sets. The partnership, timed after Kelce’s engagement to a high-profile partner, may help American Eagle capitalize on back-to-school demand and celebrity-driven traffic.
Traders and portfolio managers entering the next session should watch for two key dynamics. First, how investors interpret Nvidia’s combination of strong year-over-year results and a cautious near-term outlook. That interpretation will influence technology sector flows and could determine whether broader indices consolidate gains or pull back. Second, whether the positive retail reports translate into sustained buying interest across consumer discretionary names, especially as more companies report results in the coming weeks. The union vote at the EV battery plant and additional corporate updates will provide context on supply chain and labor cost trends that can affect earnings trajectories for industrial and auto-related companies.
Expect volatility around earnings commentary and any fresh color on China access for advanced chips. Market participants who tilt toward event-driven risk will be focused on the Nvidia earnings call and follow-up conference calls from retailers. Those who favor macro themes may keep an eye on how consumer spending signals from retail and the packaged goods sector evolve. Positioning at the open will reflect which of these narratives investors believe will have the strongest impact on profits over the next several quarters.
In short, the coming trading session should reflect a contest between technology caution and pockets of consumer optimism, with corporate headlines, labor developments and company guidance providing the deciding details.
