Stocks After NVDA: Will Tariff or Fed Rate Cut Fears Hit Markets Next?
Stocks After NVDA: Will Tariff or Fed Rate Cut Fears Hit Markets Next?
By:Ilya Spivak
Will tariff chaos fears or worries about aborted Fed rate cuts hurt markets next?
- Haven demand lifts bonds and the US dollar as stocks go “risk off”
- Nvidia fails to lift Wall Street beating on earnings and on guidance
- January US PPI inflation data now in focus, testing Fed rate cut bets
The US dollar rebounded alongside Treasury bonds, buoyed by haven-seeking capital flows as stocks fell on Wall Street. High-flying technology shares pulled the market lower as artificial intelligence (AI) darling Nvidia (NVDA) tumbled despite delivering earnings that beat analysts’ expectations.
The chipmaker reported earnings per share (EPS) of $1.62, topping forecasts at $1.54. Revenue came in at $68.13 billion, above the $66.23 billion expected. The company projected $78 billion in revenue for the current quarter, ahead of analysts’ expectations of $72.8 billion. NVDA shares fell 5.46% anyway, the biggest one-day loss in 10 months.
US PPI data: where tariff chaos and Fed rate cut bets collide
US producer price index (PPI) data is in focus next. It is expected to show that wholesale inflation slowed to 2.6% year-on-year in January – the lowest in seven months – from 3% previously. The core PPI measure excluding volatile food and energy prices is seen cooling to 3% from December’s five-month high of 3.3%.
Traders will probably keep a close eye on the “trade services” component of the data, which measures wholesalers’ margins. Readings since the advent of the Trump administration’s tariff regime in the first half of last year have revealed several months of record-setting declines as companies have sought to protect demand by absorbing the duties.
After a Supreme Court struck down most of the US president’s tariff regime last week – saying his use of IEEPA legislation to justify it is unconstitutional – the US importers that paid the levies are likely to demand a refund. The larger the margin squeeze appearing in the PPI report, the bigger such a refund might ultimately be.
Stock markets may suffer as traders digest PPI results
IEEPA-based duties dominated as the source of revenue from tariffs since early 2025, accounting for close to two thirds of it. Meanwhile, the number of lawsuits filed by companies seeking remedy from the tariffs began to climb sharply after the Supreme Court began hearing arguments in the case. There are now nearly a thousand of them.
The markets may well conclude that inflation could get a boost if all of this translates into the distribution of billions of dollars back into the economy from government coffers. That might aggravate tension between traders pining for at least 50 basis points (bps) in rate cuts this year, and Fed officials seemingly dubious about even one of them.
The stock market is unlikely to be pleased with such a readout. Tellingly, the bellwether S&P 500 and the tech-tilted Nasdaq stock indices have stalled since setting record highs in October 2025, when Fed Chair Powell chastised traders for over-extrapolating rate cut potential. The US dollar may tick higher, buoyed by yield appeal and risk aversion alike.
Ilya Spivak, tastylive head of global macro, has over 15 years of experience in trading strategy, and he specializes in identifying thematic moves in currencies, commodities, interest rates and equities. He hosts Macro Money and co-hosts Overtime, Monday-Thursday. @Ilyaspivak
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