NASDAQ To Surge After NVIDIA Smashes Earnings? – NASDAQ Analysis & Prediction 

Key Points

• The NASDAQ has had a volatile couple of weeks as markets adjust to a policy shift from the Federal Reserve. 
• NVIDIA smashes earnings, yet fell 8% after the release. This is the problem with pricing in perfection. 
• Core PCE is in focus tomorrow. A stronger dollar could limit stock market gains in the short term.
• NASDAQ to surge to a key Fair Value Gap level before the end of the week?

Market Overview

The NASDAQ hasn’t been short of action, and therefore opportunities, in the last few weeks. The three-week slump in July saw the NASDAQ fall nearly 10%, but it has responded in typical fashion by gaining 8% in the three weeks after. 

This has set up a fascinating week. The NASDAQ is down 1.5% but has recovered from Wednesday’s low of 19,100, and with the recent data, there could be a strong finish to the week.

NVIDIA Posts Impressive Earnings

NVIDIA’s stock price has been up about 160% this year, arguably the biggest success story of the last few years. Therefore, it is no surprise that all eyes were on NVIDIA’s Q2 earnings last night. The report beat estimates, with an earnings per share (EPS) of $0.68 and a revenue of $30bn. Perhaps more impressively, both figures were over double the ones released at this time last year. What followed? An 8% fall in NVIDIA stock…

This is the problem when the market prices in perfection, as what would normally be a blockbuster earnings report turns into one that initially disappoints. The NASDAQ felt disappointment with a 200-point drop, but it has since recovered.

Core PCE Price Index In Focus

Tomorrow, traders will find out the current core PCE inflation level, a high-impact release that all NASDAQ traders should pay attention to. This is the Federal Reserve’s primary inflation gauge, and the annual core PCE inflation forecast is a rise of 0.1% to 2.7%.

As mentioned in our previous GBPUSD article on Tuesday, this will unlikely stop the Fed from cutting in September. A higher core PCE report could cause a dollar bounce, limiting the gains of the NASDAQ heading into the weekend. However, a figure lower than the forecast will likely bring more risk appetite into the markets and help the NASDAQ reach 20,000.

NASDAQ To Fill Fair Value Gap?

The NASDAQ has been trending slightly lower this week, but it feels like the big move hasn’t happened just yet. After the NVIDIA earnings, the NASDAQ created a Fair Value Gap (FVG) between 19,180 and 19,270 as well as trading into a bullish order block. The order block level generated enough support to not only fill the gap, but break above it. 

This has set up the potential for the NASDAQ to surge to at least 20,000 and potentially even the 50% of the FVG at 20,120. Traders may wish to use a lower time frame order block to benefit from this move. Alternatively, a break below 19,000 could spell more weakness to come, and traders will have 18,500 in their sights.