Nvidia Lifts Nasdaq Amid Rising Inflation and Anticipated Trade with China

New York, Wednesday, 16 July 2025.
On July 16, 2025, Nvidia’s robust earnings drove the Nasdaq Composite to a new high despite rising inflation, as investors anticipate trade approvals with China impacting market expectations.
Nvidia’s Earnings Boost the Market
On July 15, 2025, Nvidia announced robust earnings, which led its shares to jump 4%, propelling the Nasdaq Composite to a record high. The market’s favorable reaction was driven by Nvidia’s announcement to resume shipments of its H20 AI chips to China, which was granted U.S. government approval. This approval is crucial for maintaining sales momentum in the Chinese market, previously at risk due to anticipated declines without such licenses [3][5][6].
Inflationary Pressures and Economic Outlook
Simultaneously, the U.S. Labor Department reported that the annual inflation rate rose to 2.7% in June 2025, up from 2.4% in the previous month. This marks the steepest increase in consumer prices in five months. Analysts attribute part of the inflation rise to ongoing tariff policies, which are beginning to reflect more heavily in consumer costs. The impact of rising inflation adds complexity to the optimistic market response following Nvidia’s earnings, as inflation typically erodes investor confidence by increasing borrowing costs and reducing real income growth [3][7].
Bank Earnings Influence Market Fluctuations
Moreover, early bank earnings reports added to market volatility. While major indexes such as the Dow Jones Industrial Average fell by nearly 1%, the S&P 500 index also faced decline amidst mixed earnings news. JPMorgan Chase, for instance, showed a minor drop as earnings season kicked in, with ongoing examinations on how inflation and high tariffs impact the financial sector’s profitability [3][7].
Future Trade Relations with China and Market Expectation
Looking forward, the expected trade approvals with China are poised to play a pivotal role in market dynamics. Nvidia’s strategic move to resume H20 chip shipments serves as a significant indicator of the potential easing of trade tensions between the U.S. and China. Investors remain optimistic that ongoing diplomacy could lead to more favorable trade terms, thereby providing a stronger economic outlook despite current inflationary challenges. These developments underscore the intertwined nature of global trade relations and domestic economic health [3][5][7].
Sources
- ca.finance.yahoo.com
- investor.nvidia.com
- nvidianews.nvidia.com
- www.investopedia.com
- www.reuters.com
- nvidianews.nvidia.com
- reddit.com