Good morning, investors. President Trump continues to pressure the central bank and Fed Governor Lisa Cook and yet, somehow, that will take a backseat for markets today as the biggest company in history reports earnings after the bell.
🎤 Taking Stock: I joined the New York Stock Exchange’s live closing bell show to discuss the tumult at the Fed and Nvidia’s earnings. You can watch the segment here.
Nvidia’s big day
One way or another, Nvidia is about to move markets.
The most important stock in the world reports earnings after the bell Wednesday, and it’s reliably the most market-moving release each quarter.
Options data implies a 6% move in either direction this afternoon, a swing of roughly $260 billion in value. That would be below its three-year average of about 7.6%, according to data from ORATS.
With a $4.34 trillion market capitalization, Nvidia now accounts for 7.9% of the S&P 500 — the largest index weighting for any stock in history.
Jay Woods, chief market strategist for Freedom Capital Markets, noted that Nvidia also dominates ETF exposure:
22% of VanEck Semiconductor (SMH)
15.8% of Technology Select Spider ETF (XLK)
“The bar keeps getting higher and the chipmaker keeps exceeding it,” Woods said. “The growth projections continue to expand exponentially and there’s been no slowdown in sight.”
Here’s what Wall Street expects for Nvidia’s fiscal second quarter, per LSEG:
Revenue: $46.2 billion, +53% year-over-year
Data center revenue: $41.2 billion, +57% year-over-year
Earnings per share: $1.01, +49% year-over-year
Only Nvidia shareholders would call those figures a slowdown. The same quarter last year, the chipmaker reported revenue and earnings growth of 122% and 151%, respectively.
Nvidia has pulled the Mag 7 higher in 2025 (Chart courtesy of Exhibit A)
“The worries are that if Nvidia doesn’t deliver, then all the worries about AI overhype and extreme valuations wouldn’t look so misplaced,” the Fundstrat team wrote in a note Tuesday.
“And if not for Nvidia, can the AI party go on? Huang is the ‘godfather of AI’ after all.”
Investors will also be watching for updates related to China and tariffs.
In April, President Trump had banned the sale of key chips to China, only to reverse the decision in July.
The White House later worked out a deal for Nvidia to give the government 15% of the revenue secured from its H20 chip sales to China.
“I bet that there'll be a dip in the stock, not necessarily after they report, but sooner or later and it'll probably be a result of Chinese trade talks and not the company's fundamentals at all,” said Paul Meeks, managing director for Freedom Capital Markets.
Market snapshot
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Elsewhere
🏦 Fed Governor Lisa Cook doesn’t plan to resign. She said that President Trump has “no authority” to fire her from her position at the central bank, and she plans to file a lawsuit challenging Trump’s move. Notably, Cook has not publicly addressed any of the allegations regarding mortgage fraud. (CNBC)
👀 The Federal Reserve said it will abide by any court decision. A spokesperson said Tuesday that Fed Governors may only be removed by the president for “cause.” In separate comments, Trump also said he would abide by any court decision on the matter. (Yahoo Finance)
🤷♂ Investors are barely reacting to the Fed drama. Stocks climbed despite the back-and-forth between President Trump and the central bank. Some strategists are looking past the politics to focus on imminent rate cuts and the boost they could provide to equities. (Axios)
Rapid-fire
China’s industrial profits saw their slowest pace of decline in five months (CNBC)
Trump warned threatened new tariffs on semiconductors in response to digital services taxes from other countries (Yahoo Finance)
New orders for key US-manufactured capital goods rose more than expected in July (Reuters)
The technical set-up for the Dow and Russell 2000 is improving this month (Barron’s)
Commerce Secretary Lutnick hinted at the US taking stakes in defense contractors (Barron’s)
Small-cap stocks could see upside ahead as rate cuts begin (Opening Bell Daily)
For better or worse, the White House is starting to run the US like a business (Pomp Letter)
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Last thing
20 for 20.
That’s the S&P 500’s track record over the next year when the Fed cuts rates within 2% of all-time highs.
Average return: +13.9% over the next 12 months.
— #Dividendology (#@dividendology)
7:43 PM • Aug 25, 2025
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About me
📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.
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