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Markets Cautious as Nvidia Earnings Loom and Geopolitical Shocks Raise Stakes

Investors are cutting chip exposure ahead of Nvidia’s Aug. 26 report because rising Treasury yields, new U.S. trade and Iran sanctions moves could push inflation and volatility higher.

Overview

  • Nvidia will report fiscal second-quarter results after the U.S. market close on Wednesday, Aug. 26, and Wall Street expects roughly $92 billion in revenue and about $2.09 in adjusted EPS.
  • Traders have been trimming semiconductor positions this week, driving broad weakness in chip names as investors fear even a strong Nvidia print could trigger a sell-on-the-news reaction.
  • Reports that server makers told major customers prices for systems using Nvidia’s AI chips could rise more than 15% have added strain to AI spending plans by hyperscalers and raised concerns about margins.
  • Macro shocks are amplifying risk: long-term U.S. Treasury yields have climbed to multiyear highs, the U.S. has imposed new tariffs on Canadian goods with Canada promising retaliation, and the Treasury plans tougher sanctions on Iran.
  • Beyond the quarter, Nvidia’s outlook matters because a small group of hyperscalers still drives a large share of sales and the company is pursuing a $500 billion GPU financing plan that could reshape how customers fund AI infrastructure.