US Stocks Plunge Amid Nvidia Earnings Anticipation and Fed Interest Rate Signals

US equities declined to start the week with the Dow shedding 349 points to 45,282.47, S&P 500 down 0.43% at 6,439.32, and Nasdaq down 0.22% at 21,449.29. The market awaits Nvidia's Q2 financial results, which could be a major market mover. Other news includes the US taking a 10% stake in Intel and President's threat to impose tariffs on rare earth magnets from China. The SPDR S&P 500 ETF Trust has a consensus Moderate Buy rating with an average price target of $716.75, implying 11.25% upside from current levels.

US equities opened the week on a cautious note, with the Dow shedding 349 points to 45,282.47, the S&P 500 down 0.43% at 6,439.32, and the Nasdaq declining 0.22% at 21,449.29. Investors are closely monitoring Nvidia's (NVDA) Q2 earnings report, which is expected to be a major market mover. The company is anticipated to report Q2 revenue of $45.94 billion and EPS of $1.00, reflecting a 53% revenue jump and 47% EPS gain year-over-year [1]. Analysts see over 10% upside ahead of earnings, making this a buying opportunity for investors.

Nvidia's strong performance is attributed to the continued growth in its Data Center business, which benefits from the increasing adoption of cloud-based solutions and the growing hybrid working trend. The company's AI chips, including the A100, H100, B100, B200, and GB200, are the top choices for building and running powerful AI applications, positioning Nvidia as a leader in the generative AI market [1].

However, Nvidia faces potential headwinds from China export curbs, which could result in an $8 billion hit. The company has reportedly told suppliers to suspend production of its H20 chip due to security concerns raised by Beijing [3]. This move is expected to impact the company's revenue, particularly in its data center business, which has been a primary growth engine.

Analysts remain optimistic about Nvidia's future. UBS analyst Timothy Arcuri recently raised his price target to $205 from $175, citing strong demand signals and projecting another beat in the upcoming Q2 earnings report [2]. Despite the challenges, Nvidia's strong product portfolio and leadership in AI make it a compelling investment opportunity.

To invest in Nvidia without taking on significant risk, consider VanEck Semiconductor ETF (SMH) or iShares Global Tech ETF (IXN), which provide diversified exposure to Nvidia and other major tech companies.

Separately, the US government has taken a near 10% stake in Intel (INTC), investing $8.9 billion in the struggling chipmaker. The announcement was made jointly by President Donald Trump and Intel on Friday [2]. The stake is part of Trump’s strategy to strengthen America’s role in global chipmaking, a sector seen as central to national security and technological leadership. The government’s shares were purchased at $20.47 apiece, amounting to 433.3 million shares. The investment is funded by unallocated grants from the Biden-era CHIPS and Science Act and a $3.2 billion allocation from the Pentagon’s Secure Enclave programme [2].

Despite the sizeable stake, the US government will not be directly involved in Intel’s decision-making. The company clarified in a press release that the government’s investment carries no board representation, governance rights, or privileged access to company information [2].

The Intel stake may not be a one-off. Trump said he hopes to strike similar arrangements with other American companies in critical industries, calling it “a win-win deal.” His administration has already negotiated unusual agreements with Nvidia and AMD, which recently agreed to share a portion of their China-related sales with the government in exchange for export licences [2].

The SPDR S&P 500 ETF Trust (SPY) has a consensus Moderate Buy rating with an average price target of $716.75, implying 11.25% upside from current levels [3]. Currently, SPY’s five holdings with the highest upside potential are Loews (L), Moderna (MRNA), LKQ Corporation (LKQ), Caesars Entertainment (CZR), and The Trade Desk (TTD).

References:
[1] https://www.ainvest.com/news/nvidia-q2-earnings-expected-bring-10-upside-invest-etfs-2508/
[2] https://www.financialexpress.com/world-news/us-news/us-takes-10-stake-in-intel-with-8-9-bn-investment-trump-calls-it-a-great-deal/3955143/
[3] https://www.tipranks.com/news/spy-etf-news-8-22-2025