The S&P 500 reached a new high on Wednesday, the dollar index surged then retreated, and NVIDIA declined 3% in after-hours trading.

All three major U.S. stock indices closed higher on Wednesday, with large-cap technology stocks showing mixed performance. However, the recent driving force behind U.S. stock gains has not been technology or AI, but rather value stocks and small-cap stocks in sectors like energy and finance. This rotation may continue into September. The Russell 2000 index, which tracks small-cap stocks, hit a new high for the year on Wednesday, though its annual gain remains only 6%, with potential to continue catching up to the three major indices. European and Asia-Pacific major markets continued experiencing adjustments, with the Hang Seng Index falling 1.3% on Wednesday.

NVIDIA released its earnings report after hours, with second-quarter performance exceeding expectations. However, data center revenue from its core business showed modest performance for the second consecutive quarter, and this quarter's revenue guidance did not account for H20 exports to China (though still above Wall Street expectations). The stock price initially plunged after hours before narrowing losses to 3%. Previously, CEO Jensen Huang indicated that the U.S. government had approved export licenses, and if H20 exports can resume in coming quarters, it could significantly boost performance.

Although investors believe data center business was slightly below market expectations, next quarter's guidance appears optimistic. Some investors also see positive aspects, with improved gross margin levels approaching management guidance. The latest results have incorporated expectations for Blackwell platform and product ramp-up, while some chip inventory was sold to customers outside China, reducing losses. Focus areas during the earnings call include customer demand conditions, Rubin product launches, and China business and gross margin guidance.

From a technical perspective, NVIDIA remains in a clear upward trend, continuing to make higher highs and lows above its rising 50-day moving average. The stock has been consolidating within a $170-185 range over the past month, perhaps in anticipation of this week's earnings.

The relatively narrow consolidation range may set the stage for a higher volatility breakout in either direction. Since options traders "only" priced in +/-6% at the release, considering the technical setup, a major surprise could catch traders off guard. As long as the stock stays above its 50-day moving average (currently near $167), the path of least resistance will remain upward.

After impressive gains over the past few years, NVIDIA now accounts for nearly 10% of the NASDAQ 100 index weight, plus its importance as a market leader and broader AI trend setter (continuing to support tech-heavy indices).

Naturally, the NASDAQ 100 index itself is in a strong upward trend, maintaining an upward channel above the 50-day moving average. Looking ahead, the August high slightly below 24,000 points represents a key resistance level worth watching, with a breakout potentially confirming the upward trend and opening channels for further gains. Meanwhile, if the upward trend breaks, the previous resistance-turned-support area around 22,150 would be a reasonable support zone to watch.

The market generally considers tech stocks expensive, but there's disagreement on whether they're in bubble territory. However, September rate cuts have reached market consensus, and historical analysis shows that on average, U.S. stocks gain +8% in the 12 months following rate cuts. This time differs from history in that tech stocks comprise a higher index proportion, highlighting the value proposition of non-tech sectors, especially interest-rate sensitive sectors and the financial industry benefiting from regulatory easing.

With Trump continuously pressuring the Federal Reserve, U.S. 2-year bond yields fell to 4-month lows and the yield curve became steeper, though the dollar index hasn't shown significant declines, maintaining around 98 but facing notable pressure above.

Gold climbed to $2,397 after confirming support around the $2,375 level, while WTI crude oil rebounded slightly to near $74, with data showing U.S. crude oil inventories fell by 2.4 million barrels last week, exceeding expected declines.

Among non-dollar currencies, the euro closed slightly lower but hit an intraday low of 1.1574 before finding support near 1.1600. USD/JPY held steady at 147.40, while the Canadian dollar led overnight gains. Thursday's focus includes U.S. second-quarter GDP revision, initial jobless claims (20:30), and 7-year Treasury auction.

EURUSD Euro/Dollar 4-Hour Chart

The euro found support around 1.1580 on Wednesday, precisely at the previous low and also at the long-term upward trendline position, making the bullish pattern formed here more reliable. Short-term exchange rates may continue upward to test above 1.1700.

Dollar weakness benefits non-dollar currencies including the euro. However, for the euro, French political turmoil represents a potential variable. President Macron expressed support for the confidence vote scheduled for September 8 in parliament, but based on current party member statements, the current government will almost certainly lose the vote, increasing the risk of government collapse and possible impeachment of Macron. French 30-year government bond yields have risen to their highest level in 14 years. Therefore, euro traders need to be cautious of black swan event impacts recently.

HK 50 Hang Seng Index 4-Hour Chart

After several days of high-level adjustments, the Hang Seng Index (HK50) fell to the key support level of 24,880, potentially providing temporary stabilization. Intraday focus on whether bullish reversal patterns can form near moving averages and trendlines.

If the upward trend continues, bulls will target the previous high of 25,900-26,000 in the short term. On the downside, a break below 24,300 would increase the risk of continued pullback.