Good morning, traders,
Friday gave the market a shot of adrenaline.
After Fed Chair Jerome Powell’s speech at Jackson Hole, the major indexes roared higher and Wall Street took his tone as a green light for rate cuts later this year.
No promises, of course, but traders heard what they wanted to hear.
It’s no secret that this kind of move isn’t unusual. Markets are always looking for an excuse to run higher.
What matters is why they’re running and whether there’s fuel to keep them going.
Which brings us to this week.
Stock futures ticked down early Monday morning — not in panic, just traders catching their breath.
After Friday’s 2% pop, the market’s looking at what’s next.
And right now, the biggest name on the board is Nvidia, which reports earnings Wednesday after the bell.
If you’ve been around the markets at all over the past year, you already know what Nvidia represents.
They’re the poster child for the AI boom. The company’s chips are in just about everything from data centers to self-driving car prototypes to the next-gen tools OpenAI is building.
And Wall Street’s expecting another blowout quarter — analysts are looking for record sales yet again.
But here’s the twist…
We’re starting to see cracks forming.
Here’s what they are and how to handle them.
Flying High
Between U.S. export restrictions to China and the sheer weight of sky-high expectations, Nvidia’s margin for error is razor-thin.
One hint of slowing momentum, or even just not blowing the doors off, and the stock could take a hit.
That matters for more than just Nvidia shareholders.
This company’s basically become a sentiment gauge for the entire AI trade.
If they miss — or even just don’t wow — that 2% rally from Friday could be erased fast.
So if you’re active in the market this week, eyes on Wednesday after the bell. Whatever Nvidia reports will ripple through everything from semis to tech to the broader indexes.
Important Data, Too
That’s not the only story playing out.
We’ve also got a couple key data releases coming in hot.
Consumer confidence hits Tuesday and PCE inflation drops Friday.
PCE is the Fed’s favorite inflation measure, so that’ll carry weight.
If it cools off meaningfully, it’ll reinforce Friday’s rate-cut optimism.
If it doesn’t, that rate-cut narrative starts to look shaky again.
Consumer confidence, meanwhile, will tell us how the average American is feeling about jobs, prices, and the economy in general.
And look, I’ll give you one sign that sentiment is getting shaky…
Some businesses have started offering “recession specials” again.
You read that right. It’s 2025, and we’re seeing restaurants and retailers roll out discounted pricing — just like they did in ’08 and ’09 — to keep folks coming through the door.
They’re not doing that because business is booming. They’re doing it because foot traffic’s slowing and people are tightening their belts.
Waiting and Weathering
So while Friday’s rally felt good, it doesn’t change the fact that we’re still on edge.
The truth is, we’re in one of those classic “show me” phases.
Markets are pricing in good news ahead of time.
But the follow-through — whether it’s Nvidia blowing out earnings or inflation data softening — has to be there.
If the actual numbers don’t back up the optimism, this market will snap back fast. That’s not doom and gloom, that’s just how it works.
As a trader, this is the kind of setup I love.
It’s not about trying to guess the future. It’s about preparing for both outcomes and having a game plan either way.
If Nvidia crushes it and inflation stays tame, we could see another leg up.
If they disappoint or PCE comes in hot, that bounce could fizzle out by next Monday.
I’ve traded through moments like this dozens of times, so hear me when I say, “Stay sharp.”
Make sure you’re being flexible and your risk is tight.
And above all, don’t fall in love with the headlines. We’re in a market that rewards discipline more than ever.
Stay street smart,
Jeff Zananiri
P.S. Join us Tuesday at noon ET for a special Gamma Code seminar with Danny Phee.
He’ll walk through the setups driving real results in this market — what’s working, what to avoid, and how he’s positioning right now.
If you’re serious about trading options with precision, this is one session you’ll want to catch.
*Past performance does not indicate future results
