Nvidia shares have gone down about 1.7% in pre-market trading. This is better than the 3% drop seen after hours following the company’s earnings report. Although earnings slightly beat expectations, disappointing data center sales and concerns about operations in China have led to this decline. Overall, market sentiment appears stable. Earlier in the month, there were dips due to non-farm payroll data and another drop last week. Worries are growing that Nvidia’s potential fall might interrupt its monthly gains, which had increased for five consecutive months, particularly strong before August.

Market Conditions Overview

Before the market opens, Nvidia shares are steady. US futures show some caution. The S&P 500 and Nasdaq futures are unchanged, while Dow futures have risen slightly by 0.2%. The drop in Nvidia shares, despite the slight earnings gain, presents a chance in the options market. Implied volatility on Nvidia options dropped from over 85% before the news to about 55% this morning. This makes strategies like selling puts or put spreads appealing for those who feel this dip is temporary and want to profit from the remaining premium. The main issue is the slowdown in data center growth, which was 15% quarter-over-quarter, while the market expected around 25%. This, along with uncertainty from US export controls on China announced in June 2025, is why the stock isn’t rising. After a five-month surge where the stock gained over 60% from March to July 2025, a period of consolidation seems likely. For those holding long positions, buying protective puts with September expirations could be a wise way to guard against further losses. The broader market is cautious, as the VIX climbed to 17.5 earlier this month from summer lows near 14. This indicates that while there isn’t panic, protecting portfolios is becoming more important in the coming weeks.

Trading Strategy Outlook

We think the stock might enter a sideways trading range as the market adjusts to this new growth outlook. We recall similar patterns from tech pullbacks in late 2022, where a leading stock loses momentum before the next big move. This environment could be perfect for range-bound strategies like iron condors, which benefit from low volatility and time decay. Create your live VT Markets account and start trading now.

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