On August 28, 2025, Asian economic data is unlikely to influence the market significantly. Global events are taking priority over local data. Meanwhile, trade tensions are heating up, with the United States proposing a 15–20% minimum tariff on all EU goods. Mexico also plans to raise tariffs on China. In corporate news, Nvidia shared its earnings report, showing an earnings per share (EPS) of $1.05, beating the expected $1.01. However, Nvidia’s stock closed at $181.60, down 0.09%, and fell to $175.39 after hours, a drop of 3.42%.

Market Indices and Cryptocurrency

The S&P 500 and Nasdaq both rose by 0.2%, while the Dow gained 0.3% ahead of Nvidia’s earnings. Solana (SOL) jumped 8% to $209, outperforming Bitcoin, which saw only a 2% increase. Foreign exchange trading remains risky, with high potential for significant losses. Traders should evaluate their risk tolerance and consider seeking expert advice. Relying only on opinions or analyses for decisions is risky, as past performance does not guarantee future results. Despite Nvidia’s strong earnings, the stock declined to nearly $175 in after-hours trading. We believe this positive news is already factored into the tech sector. Unlike the sharp post-earnings rallies of 2023 and 2024, this reversal shows that excessive optimism is now a risk. Traders might think about buying put options on the Nasdaq 100 ETF (QQQ) to protect against a potential tech downturn in the weeks ahead. The renewed discussions of a 15-20% tariff on EU goods and new Mexican tariffs on China pose serious challenges to the market. We have seen similar situations before; during the 2018-2019 trade disputes, the VIX index often spiked above 20 due to tariff news, benefiting those who purchased volatility protection. Buying VIX call options or futures may be wise to prepare for the likely increased volatility from these trade conflicts.

Strategic Concerns and Defensive Positions

The current divergence shows stock indices reaching new highs while currency markets remain unstable. This uncertainty, along with a strengthening US dollar, makes us cautious. If the Dollar Index (DXY) continues to rise above 105, a level it struggled with in late 2024, it could add further pressure to equities and commodities. Given these mixed signals, traders should prioritize capital protection in the coming weeks. The market seems to overlook geopolitical risks, creating a chance for traders to set up defensive positions at a lower cost. Using collar options, where you sell an out-of-the-money call to fund the purchase of a protective put, is a smart strategy for major index holdings like the SPY. Create your live VT Markets account and start trading now.

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