European stock indices finished the day higher, while major US indices changed only slightly. The Dow Jones Industrial Average rose by 146.98 points, or 0.32%, closing at 45,565.05. The S&P 500 also set a new record high for the 19th time this year, gaining 15.46 points, or 0.24%, to reach 6,481.40. The NASDAQ index increased by 45.87 points, or 0.21%, closing at 21,590.14. Nvidia is set to announce its earnings at 4:20 PM ET, with shares dropping by $0.26, or -0.14%, to $181.51. Analysts expect earnings per share of $1, compared to last year’s $0.68, which is a 47% increase. Projected revenues are $46.05 billion, rising from $30.04 billion last year, reflecting a 53% increase. However, there are worries about the pace of growth, despite the stock’s price jumping 35.17% this year.

Nvidia’s Impact on Market

In after-hours trading before Nvidia’s earnings release, Snowflake shared its Q2 2026 results, reporting earnings per share of $0.35, surpassing expectations of $0.27. Revenue reached $1.10 billion, exceeding the expected $1.08 billion, leading to a 12.48% rise in shares. CrowdStrike, on the other hand, reported Q2 2025 results with earnings per share of $0.93 (against an expected $0.83) and revenue of $1.17 billion, slightly above the $1.15 billion estimate. However, its shares dropped 7.9% in after-hours trading. With the S&P 500 reaching its 19th record high for 2025, the market remains strong. Yet, the CBOE Volatility Index, or VIX, is around 14, indicating a lot of calmness among investors. This mix of record highs with low fear suggests that portfolios might be at risk for sudden dips. Everyone is focused on Nvidia’s earnings as its results are crucial for the whole market. Revenue is expected to exceed 50% growth compared to the same quarter in 2024, setting a high standard. With Nvidia stock already up 35% this year, just meeting earnings expectations may not satisfy investors. In the options market, traders anticipate a potential stock move of nearly 10% in either direction for Nvidia after the earnings report. This has driven implied volatility to very high levels, which makes simple bets expensive. This volatility premium is expected to disappear quickly after the earnings numbers are announced, in a process known as “IV crush.”

Market Caution

The drop in CrowdStrike’s stock, despite beating earnings and revenue estimates, serves as a significant warning. It shows that the market punishes anything less than outstanding performance, a trend seen repeatedly with high-valuation growth stocks over the past year. Since Nvidia accounts for over 6% of the S&P 500, any negative surprises could significantly impact the entire index. It may be wise to buy short-term puts on the SPY or QQQ as a cost-effective way to protect against a potential tech-led market pullback in the upcoming weeks. Create your live VT Markets account and start trading now.

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