TheDrop Market Analysis, 08/28/25

Markets had a very unexpected rise after Nvidia's poor earnings results, fueled by a surprise rise in the national GDP in Quarter 2, overshadowing previous worries.

U.S. President Donald J. Trump.

The S&P 500 composite rose 0.32%, the Dow Jones 30 composite rose 0.16%, the Nasdaq composite surged 0.53%, and the Russell 2000 composite stayed flat with a 0.19% rise. The Japanese Nikkei 225 followed in their American counterparts' footsteps with a 0.73%, while other externally traded funds like the British tech-heavy FTSE 100 saw marginal losses over the course of the day.

The USD strengthened against many major currencies, with it weakening against the Japanese Yen, as the Yen makes a recovery. The bond market made some losses as the 10-yr bond rate fell 0.73% as a rate cut in September is very likely according to most analysts after Fed chair Jerome Powell's recent Jackson Hole speech.

Gold and silver both strengthened tremendously, carrying on their recovery from previous losses. Oil ticked higher as the GDP saw a boom, showing strong consumer demand, for now.

While Nvidia's earnings report for the second quarter proved abysmally for the stock, with it falling 0.8% over the day, investors were caught off guard by a strong GDP growth of 3.3%, much stronger than anticipated. This subsequently delighted investors by concluding that tariffs have not stopped the U.S. economy from continuing to expand. This further solidified the U.S.-China GDP divide as the latter continues to struggle with a poor housing market among other problems.

The Magnificent Seven proved largely strong today, with Amazon and Google taking the lead in daily growth. However, analysts have continued to raise alarms that the AI market will have an "inevitable" slowdown as other companies push to invest in AI more than Nvidia, weakening its current market dominance.