Nvidia: From jolt to stabiliser

The S&P 500’s move through 6,500 wasn’t fireworks or drama. It was a steady, deliberate march — the kind of stride that shows the consensus has already voted with its feet. Yesterday’s dip around Nvidia was just a pothole, the kind that jolts the suspension but doesn’t change the direction of travel. The AI caravan keeps rolling, and for now, traders are still paying up for the view that this rally has more ground to cover.

The market has a way of turning yesterday’s anxieties into today’s afterthoughts. Nvidia’s earnings, the supposed thunderclap, landed more like a heavy raindrop — briefly unsettling, but quickly absorbed into the broader flow of the tape. The stock wobbled at first on guidance that didn’t leap tall buildings in a single bound, yet it soon steadied. Traders realized the AI caravan hadn’t lost its wheels; it merely slowed for a checkpoint. At nearly 8% of the S&P, Nvidia isn’t just another passenger — it’s the axle of the current rally. And even if the forecast lacked fireworks, the omission of China sales in its outlook leaves an unpriced kicker dangling like bait. If Washington and Beijing strike a deal, the numbers could fatten quickly, reminding us this ship is still loaded with powder below deck.

Around it, the broader economy flexed its resilience. The revised GDP showed the US growing at a 3.3% clip in Q2, with the consumer still carrying the torch despite tariffs, import distortions, and ongoing whispers of a slowdown. It’s as though the American household refuses to relinquish the oars, even as the tides grow choppier. Jobless claims, too, point to employers gripping their workers tightly — perhaps out of loyalty, perhaps out of fear they won’t easily find replacements. Whatever the reason, the labour keel still holds steady.

Yet the sea ahead isn’t without reefs. The PCE report due Friday looms like a navigational buoy: pass safely and the rally sails on, clip it and the hull could scrape. Traders know this game; Nvidia was priced with a 6% swing implied, but the boat barely rocked. At the same time, PCE carries a decent option premium of expectation, but most suspect it too will be absorbed, a speed bump, not a derailment. Powell’s Jackson Hole speech gave the market hope that cuts are coming, but inflation is still sticky enough to keep hands on the wheel.

In the currency markets, the dollar has finally begun to bend again. EUR/USD threatened 1.1700, thanks to stabilizing EU bond yields and healthy car sales data in Germany. The real story lies further east. Beijing has taken the painter’s brush to its currency, fixing the yuan stronger day after day. It’s a deliberate act — less about near-term growth, more about casting China as a responsible steward of global finance. A firmer renminbi cushions households’ purchasing power, draws in foreign capital, and signals intent to wear the robes of a grown-up central bank. Like a tugboat pulling others in its wake, the yuan drags emerging-market currencies along with it, from the rand to the real, and even lends a tailwind to the euro.

Traders would be wise, however, to keep the calendar in mind. September has a nasty habit of turning smiles into grimaces. On average, it’s the market’s cruellest month — a season where rallies often stumble. Yet this year, the market enters September above its 200-day moving average, sails taut with momentum, and a cut on the horizon like a lighthouse beam. History whispers of storms, but the present sky shows clear blue.

What’s becoming a bit clearer is that this isn’t just a one-stock story, nor a single-sector dream. Nvidia may be the poster child, but the AI revolution is beginning to broaden its cast. However, the sell side is pointing clients to the laggards, the secondary characters in this rally: financials, utilities, and healthcare. These steady plodders may yet enjoy their moment as capital redistributes down the value chain. The rally is no longer about one rocket; it’s a fleet.

For now, the market hums like a train on polished rails. There are bumps, yes, but the rhythm of forward motion persists. Nvidia may no longer set off fireworks, but the economic engine is still warm, the dollar’s grip is loosening, and the renminbi is rising like a new conductor in the orchestra. The music hasn’t stopped — if anything, it’s just shifted to a steadier tempo. Traders can dance while it plays, mindful that September is never far from turning harmony into dissonance.

For now, the skies are blue, the VIX is anchored, and the AI engine is still running hot — but September always keeps traders on their toes. The road ahead may have bends, but there are no derailments in sight.