Post‑Nvidia Hangover: Futures Drift Ahead of GDP Revamp and Fed Speeches — Aug 28 Trading Blueprint

Market Overview & Sentiment News

• Nvidia earnings wobble: Global equities were modestly higher despite nervousness in tech stocks. Nvidia’s post‑earnings slide of about 2.2% in pre‑market trading signalled profit‑taking after its AI‑driven surge and highlighted investor sensitivity to any slip in its data‑centre revenue. The MSCI World index edged up 0.1% and the STOXX 600 gained roughly 0.4%, suggesting resilience outside the mega‑cap tech sector.
• Fed independence and rate expectations: Traders priced an ~88% chance of a 25‑bp cut at the September FOMC meeting, with the 2‑year Treasury yield near multi‑month lows. However, former President Trump’s attempt to dismiss Fed Governor Lisa Cook fuelled debate over the central bank’s independence. New York Fed President John Williams reiterated that any easing will depend on upcoming data.
• Oil and commodity pulse: Oil prices slipped as investors anticipated reduced U.S. fuel demand at the end of summer and monitored Russian supply disruptions. Brent crude traded near $67.67. Gold held firm near recent highs on a soft dollar, while silver and platinum slipped modestly.
• Geopolitical and macro headwinds: Political risks in France and simmering U.S.–China tensions added to market caution. Investors also watched European equities, which gained about 0.4%, and corporate earnings from U.S. retailers.

Technical Analysis

• Major indices hold above VWAP: ES, YM and NQ futures rallied overnight and are consolidating near their upper VWAP bands. The bullish bias remains intact as long as pullbacks hold VWAP and pre‑market higher‑lows. A break below these levels could trigger a retracement to the mid‑VWAP band.
• NQ leadership but vulnerable: Nasdaq futures continue to lead; however, momentum has slowed after the pre‑dawn surge. Avoid chasing strength into major resistance and instead look for 1–3‑minute bull flags on rising volume for continuation plays.
• RTY catching up: The Russell 2000 is playing catch‑up, trading above VWAP with rising breadth. Watch for sustained moves above opening‑range highs to confirm broader risk‑on sentiment; failure to hold could lead to choppy mean‑reversion.
• Crude oil range‑bound: CL futures oscillate around their VWAP with no clear trend. Expect range trading between support near $66.80 and resistance around $67.80. Fade rallies toward the upper band unless inventory data or rig counts spark a breakout.

Economic Calendar Analysis & Trading Plan

• 8:30 AM – GDP & inflation gauges: Expect significant volatility around the release of Q2 GDP second estimates and related price indices. A print substantially above 3% or hotter‑than‑expected PCE/core PCE could push yields higher and pressure equity futures; a miss would reinforce rate‑cut bets.
• Jobless claims: Initial claims near 230 k and continued claims around 1.97 M will provide a snapshot of labour‑market health. A surge above consensus could dampen sentiment, while a decline would support risk.
• 10:00 AM – Housing data: The larger‑than‑expected fall in July pending home sales underscores housing market weakness. If futures retrace into this data, traders might fade initial moves and wait for confirmation.
• 10:30 AM – Natural gas inventories: The smaller‑than‑expected build (13 Bcf vs. 27 Bcf) may underpin natural‑gas‑linked equities. Reduce size into 10:25–10:35 AM and trade only after a 1–2‑minute candle closes beyond the initial spike.
• 11:00 AM – Kansas Fed indices: Manufacturing index remains negative but improved to –3. Watch rate‑sensitive sectors for reaction. Composite index at +1 signals modest activity.
• Treasury auctions & mortgage rates: Monitor the 4‑, 8‑week bill sales and the 7‑year note auction. Weak demand may steepen the curve and weigh on tech. Mortgage rates near 5.7% (15‑year) and 6.6% (30‑year) remain a drag on housing.
• 6:00 PM – Fed Waller speech: Comments after the bell could set the tone for Friday’s session, especially if Fed independence or the rate path are discussed.

Foundational Analysis

• Disinflation but not mission accomplished: Core inflation is trending down toward the 2% target, but Thursday’s GDP price index and PCE readings will determine whether the Fed can confidently pivot to cuts.
• Fed independence in the spotlight: Political pressure on the Fed, highlighted by attempts to dismiss Governor Cook, could undermine market confidence and lift risk premiums.
• Valuations and leadership: With the S&P 500 trading above 22× expected earnings, any disappointment in earnings (as seen with Nvidia’s modest miss) could trigger outsized reactions.
• Energy dynamics: Comfortable supply and high U.S. production keep crude subdued. Without a supply shock, rallies may fade until inventories tighten or OPEC+ changes stance.
• Key risks: Hot inflation, GDP slowdown, or geopolitical shocks could catalyse profit‑taking. Conversely, dovish data and easing rhetoric reinforce risk‑on sentiment.

Today’s Strategy for Scalpers & What to Watch For

• Pre‑open mapping (9:20–9:30 ET): Mark overnight high/low, VWAP and opening‑range levels. Bias follows the first VWAP test. Be ready to fade extremes if the 8:30 AM reaction is overdone.
• 9:30–9:55 ET: Trade smaller size and prefer fading moves back to VWAP. Take partial profits quickly and avoid hero trades.
• 10:30 AM – Natural gas protocol: Flatten or reduce size into 10:25–10:35. Wait for a 1–2‑minute candle to close beyond the spike before entering. Use half‑size and wider stops.
• Mid‑morning watch (11:00 AM): Kansas Fed indices may prompt moves. Keep exposures light until after the initial reaction settles.
• Auction & housing data (10 AM–1 PM): Pending home sales and the 7‑year note auction may swing yields. For equities, watch high‑duration tech. For crude, watch rig counts and nat‑gas.
• Execution edge: In this headline‑heavy environment, execution speed is key. Partnering with QuantVPS can minimize slippage.

Post‑Open Outlook / What Could Happen After Market Open

• Data‑driven volatility: If GDP growth exceeds expectations and inflation stays contained, look for a trend‑up day led by NQ with RTY confirmation. Weak growth or hot inflation could prompt mean reversion to VWAP or lower.
• Mid‑session digestion: After the initial surge, expect a noon lull. Secondary push aligns with morning’s trend unless energy or yields shift tone.
• Afternoon dynamics: Watch for yield and crude moves after the 7‑year auction and nat‑gas data. Late‑day volatility may rise with Fed Waller’s speech risk and anticipation of Friday’s PCE report.

Summary

Equity futures are digesting Nvidia’s results and a slew of economic data. The technical tape favours continuation higher if opening‑range highs and VWAP hold, but catalysts including GDP revisions, inflation gauges, jobless claims, housing data, natural‑gas inventories, Treasury auctions and Fed speeches argue for nimble positioning. Disinflation progress and dovish rate expectations support risk assets, yet rich valuations and political uncertainty around Fed independence are notable headwinds. Trade the reaction, not the prediction, and keep risk tight.

Sources: Based on Reuters, Bloomberg and economic calendar reviews.