Nasdaq Edges Higher Amid Mixed Signals; Nvidia’s Outlook Clouded by China Trade Concerns
August 28, 2025 — By Johann M Cherian and Sanchayaita Roy
The Nasdaq Composite managed to eke out gains on Thursday, closing modestly higher despite facing pressures from a decline in Nvidia shares. Investors remain cautious as rising Sino-U.S. trade uncertainties continued to cast a shadow over the semiconductor giant’s near-term sales outlook.
Market Snapshot
- Dow Jones Industrial Average: Declined 0.08% (down 35.7 points to 45,529.53)
- S&P 500: Flat, edging up 0.01% (gaining 0.57 points to 6,481.97)
- Nasdaq Composite: Rose 0.22% (up 46.98 points to 21,637.12)
The markets showed choppy trading throughout the session, reflecting mixed signals from corporate earnings, economic data, and geopolitical tensions.
Nvidia Shares Slide on China Sales Uncertainty
Nvidia, a key driver behind recent enthusiasm around AI, saw its shares dip 1.3% amid volatile trading. The company’s latest quarterly forecast notably excluded potential revenue from China, raising concerns about ongoing challenges to business operations in what remains a crucial market.
Earlier this month, Nvidia secured specific U.S. government licenses allowing the sale of its H20 AI chips to China, following a revenue-sharing agreement. However, uncertainty persists due to the broader Sino-American trade tensions. Analysts also questioned whether the company’s data center results might signal tighter spending from major cloud service providers.
Thomas Hayes, chairman at Great Hill Capital, remarked, “China is a big part of their business, and until that’s resolved, there’s going to be a bit of an overhang on what they can do in terms of guidance and what they can project in terms of growth.”
Despite these concerns, Nvidia’s strong quarterly revenue forecast coupled with its ambitious $60 billion share buyback plan and optimistic comments from CEO Jensen Huang helped temper some investor worries about AI demand.
AI Sector Powers Broader Market Gains
Artificial intelligence remains a potent catalyst for Wall Street’s ongoing rally, now approaching its three-year mark. The momentum has withstood multiple headwinds, including competition from cheaper Chinese AI models and tariff-driven selloffs earlier this year.
Semiconductor peers showed a mixed performance: Super Micro Computer dropped 1.1%, while Broadcom climbed 2.5% after Oppenheimer raised its price target. Notably, major Nvidia customers like Meta and Microsoft saw marginal uplifts.
On the broader tech front, the S&P 500 technology sector gained 0.2%, and the semiconductor-focused chip index rose 0.3%.
Snowflake, the data analytics company, led the gains after boosting its fiscal 2026 product revenue forecast, citing robust AI-driven demand, with shares soaring 17.8%. HP Inc. also benefited from elevated demand for AI-powered PCs, climbing 2.4% following stronger-than-expected Q3 revenue results.
Economic Data and Federal Reserve Outlook
Underlying market optimism is fueled by expectations that the Federal Reserve may initiate an interest rate cut as early as September—potentially the first this year. The probability of a rate reduction next month stands at 88.8%, according to data from LSEG.
Supporting such optimism, weekly jobless claims came in below forecasts, and corporate profits rebounded strongly in the second quarter, easing fears of an immediate economic slowdown.
Investors now focus on Friday’s Personal Consumption Expenditures (PCE) report—a key inflation gauge. Any uptick in inflation could temper expectations for an upcoming Fed rate cut.
In other noteworthy news, Fed Governor Lisa Cook has filed a lawsuit challenging President Donald Trump’s recent attempt to remove her from office. Meanwhile, remarks from Fed Governor Christopher Waller, perceived as dovish and a frontrunner to succeed Fed Chair Jerome Powell next year, are anticipated later today.
Additional Market Movers
- Hormel Foods shares tumbled 13.5% after the company issued a disappointing quarterly profit forecast.
- On the New York Stock Exchange, declining stocks slightly outpaced advancing issues (1.08 to 1).
- On the Nasdaq, advancing issues edged out decliners by a margin of 1.1 to 1.
- The S&P 500 recorded 26 new 52-week highs versus 3 new lows.
- The Nasdaq Composite posted 92 new highs and 35 new lows.
Looking Ahead
Investors remain watchful as geopolitical tensions, corporate earnings trajectories, and central bank policies will continue to shape market dynamics. The integration of AI advancements alongside trade complexity will be pivotal for tech giants like Nvidia and the broader technology sector.
For the latest updates and in-depth market insights, stay tuned to Smart Money Mindset.
Disclaimer: This article is based on information sourced from Reuters and reflects market conditions as of August 28, 2025.