Insights 
VT 
European stock indices closed higher, with major US indices experiencing minimal changes. The Dow Jones Industrial Average increased by 146.98 points or 0.32%, finishing at 45,565.05. Meanwhile, the S&P 500 closed at a new record high for the 19th time this year, rising 15.46 points or 0.24% to 6,481.40. The NASDAQ index also saw gains, increasing by 45.87 points or 0.21% to 21,590.14.
Nvidia’s earnings announcement was scheduled for 4:20 PM ET, with shares decreasing by $0.26 or -0.14% at $181.51. The expected earnings per share are $1 compared to $0.68 last year, marking a 47% increase. Expected revenues stand at $46.05 billion, up from $30.04 billion last year, reflecting a 53% rise. Despite the year’s price increase by 35.17%, there are concerns regarding the speed of growth.
Nvidia’s Impact on Market
In after-hours trading ahead of Nvidia’s announcement, Snowflake reported its Q2 2026 results with earnings per share of $0.35, beating expectations of $0.27. Revenue reached $1.10 billion, surpassing the expected $1.08 billion, with shares rising by 12.48%. CrowdStrike’s Q2 2025 results showed earnings per share of $0.93 against the expected $0.83, with revenue at $1.17 billion compared to the $1.15 billion estimate. However, its shares fell by 7.9% in after-hours trading.
With the S&P 500 hitting its 19th record high for 2025, the market is clearly in a strong uptrend. However, the CBOE Volatility Index, or VIX, has been hovering at a low level around 14, indicating a high degree of complacency among investors. This combination of record highs and low fear suggests that portfolios could be vulnerable to a sudden shock.
All eyes are on Nvidia’s earnings, as its performance is critical for the entire market. With revenue expected to jump over 50% from the same quarter in 2024, the bar is set extremely high. Given Nvidia’s stock is already up 35% this year, we believe a simple earnings beat will not be enough to satisfy investors.
Looking at the options market, traders are pricing in a potential post-earnings stock move of nearly 10% in either direction for Nvidia. This has pushed implied volatility to extreme levels, making it expensive to place simple directional bets. This premium is set to evaporate moments after the numbers are released, a process we call “IV crush.”
Market Caution
The reaction to CrowdStrike’s earnings serves as a critical warning for us. Despite beating both earnings and revenue estimates, the stock is trading down significantly in the after-hours session. This demonstrates a market that is punishing anything less than perfection, a trend we have seen repeatedly over the last year with high-valuation growth stocks.
Because Nvidia now represents over 6% of the S&P 500, any negative surprise will have an outsized impact on the entire index. We should therefore consider buying short-term index puts on the SPY or QQQ. This can serve as a relatively cheap hedge against a potential tech-led market pullback in the weeks ahead.
