This is one of those weeks where everything should be great, but something still feels a little off.
Case in point:
GDP just got revised up — way up.
Unemployment claims dipped, which is interesting considering President Trump fired a Bureau of Labor Statistics commissioner earlier this month for a weaker-than-expected jobs report in July and deep downward revisions to previous numbers.
Meanwhile, Nvidia, a market powerhouse and prominent member of the Magnificent Seven tech stocks, printed earnings that would make most CEOs start eyeing vacation homes in the South of France.
But instead of fireworks, the market’s reaction was … lukewarm at best.
In some spots, it was flat-out cold.
So what’s going on here, traders?
Let’s unpack this before PCE numbers hit tomorrow and throw another wrench — or spark — into the mix.
Good News, Bad News
First, the big surprise: The U.S. economy grew 3.3% in Q2.
That’s a solid beat over the initial estimate and a massive turnaround from the weak 0.5% contraction in Q1.
If you’re looking at that and thinking, “Shouldn’t stocks be ripping higher?” — you’re not crazy.
That kind of rebound usually lights a fire under the markets.
But the market isn’t a machine. It’s more of a mood ring. And right now, it’s flashing a weird shade of “wait and see.”
We also got jobless claims that ticked down slightly — 229,000 versus the 230,000 expected.
Not a game-changer on its own, but when you stack that next to GDP, it adds to the narrative: The U.S. economy isn’t cooling down the way the Fed probably hoped.
And that’s where things get interesting for traders.
While all of this is good news for Main Street … it’s not necessarily what Wall Street wants to see.
Strong data right now brings up an uncomfortable possibility: Rate cuts might not be coming as fast or as aggressively as some traders hoped.
You’ve probably heard the phrase, “Good news is bad news,” when it comes to the market.
This is one of those moments.
Stronger-than-expected growth and employment numbers give Chair Powell and the Fed more cover to stay hawkish.
And if inflation stays sticky — watch tomorrow’s PCE print —that’s exactly what they’ll do.
Great Expectations
Now let’s talk about Nvidia.
They just printed a $46.7 billion revenue quarter, up 56% year-over-year.
That would be jaw-dropping for just about any company, let alone one that already reached a trillion-dollar valuation last year.
Yet, the stock dipped after earnings.
Why?
Expectations.
The market is pricing perfection into Nvidia.
Analysts were expecting $41.3 billion in data center revenue. Nvidia posted $41.1 billion.
That’s a beat by almost every metric … but when the bar is already set in orbit, sometimes “incredible” isn’t enough.
Traders have to remember: Stocks don’t trade on what happened. They trade on what’s next.
And the market is trying to figure out if this AI boom still has legs at this level.
Everyone’s in. Hedge funds, retail, sovereign wealth.
When that many people are already long, it doesn’t take much to tip things the other way, even for a company like Nvidia.
But don’t get it twisted. This wasn’t a “bad” report. It was just a reminder that expectations matter just as much as fundamentals.
In a Nutshell
So what does all this mean for us?
Two things.
First: Stay flexible.
We’re in a moment where economic data is coming in hotter than expected, but the market isn’t responding like it used to.
That creates opportunity for bulls and bears alike.
If PCE comes in tame tomorrow, that could ease rate concerns and flip sentiment quickly.
But if inflation’s still sticky, expect some pain.
Second: Know the game you’re playing.
This isn’t the time to guess or hope. It’s the time to trade setups with real edge.
If you’ve got a plan, and you’re executing with discipline, you’re already ahead of 90% of people out there trying to trade off headlines.
This market is giving traders plenty to work with, but only if you’re reading the tape, not the news.
Stay street smart,
Jeff Zananiri
P.S. Want to see how we’re trading? This Saturday at 8 p.m., join Danny Phee live for a no-BS breakdown of how he’s using short-term options to crush this market.
Plus: Don’t miss our Labor Day weekend deal — 12 months FREE for Annual and Platinum members.
Show up, lock it in, and start trading like a machine.
*Past performance does not indicate future results
