Semiconductor giant NVIDIA Corporation (NASDAQ:NVDA) reported record revenue in the third quarter and provided bullish guidance. While shares initially traded higher, the results weren't enough to push the stock to new highs or for the overall market to trade higher.
Nvidia Earnings Fail To Propel Market
Record overall revenue and record revenue for Nvidia's data center segment led to shares trading higher before reversing course on Thursday, the day after financial results were expected.
Expectations were high for Nvidia, with some investors saying the stock was the market's only or last hope.
Freedom Capital Markets Chief Market Strategist Jay Woods highlighted the huge expectations for the company ahead of earnings, recapping the event in his weekly newsletter.
"For those of us like myself expecting Nvidia to play Atlas and hold up this market realized that Atlas shrugged," Woods said.
Woods said the quarterly results "were great," but the rollercoaster ride of the shares was unexpected.
Nvidia shares traded higher after hours on Wednesday and opened at $195.95 Thursday morning. Shares then reversed course, with the day's high coming close to the open at $196.00 per share. Nvidia stock traded between $179.85 and $196.00 on Thursday, closing at $180.64, down 7.8% from the opening price.
Despite the record quarter, Nvidia shares failed to maintain the after-hours move and hopes of the stock hitting new all-time highs were quickly erased. Nvidia shares hit an all-time high of $212.19 on Oct. 29.
Woods said he expects Nvidia shares to "trend sideways" now and trade around their 50-day moving average going forward. The upside level is $196 with downside support around $175, the market expert added.
"Given its history of great results followed by sideways price action, expect it to take weeks before resuming its trend higher."
Market Correction?
Along with Nvidia hitting an all-time high on Oct. 29, that is also the day that the SPDR S&P 500 ETF Trust (NYSE:SPY) hit a high of $689.70.
With the S&P 500 down over 5% from its highs, Woods said the question is now whether this is a normal market correction or something else.
"Consolidation phases are normal and they take time and patience," Woods said.
Woods said seasonality has not followed historical trends with the normal weak August and weak September periods never happening. The market has fought off historical trends with six straight months of gains.
Woods said instead that investors could follow trends, a strategy that seems to be working.
The market expert highlights consumer sentiment being at its lowest level in 2025, dropping below levels seen during the Liberation Day selloff earlier this year.
"That contrarian indicator worked well in April and is now triggered again. In fact, the only lower level recorded since last week was summer of 2022 – just months before the major bear market low."
Woods said that strong selling pressure happened last week, with over 80% of the S&P 500 stocks trading below their 10-day moving average. This last occurred in 2025 during the October and March/April lows, with stocks rallying after both.
The market expert said both contrarian indicators hitting extremes could provide hope that a rally is coming.
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