Insights 
VT 
Key Points:
- Nvidia surged 4% overnight, holding gains near $172
- US CPI data shows tariffs are starting to drive inflation
- Fed rate cut odds fall; dollar surges against yen
Asian markets opened to a cautious tone on Wednesday, weighed down by resurgent inflation fears and a recalibration of Federal Reserve rate expectations.
But amid the pullback, tech names stood tall—none more than Nvidia, which continued to hold firm after a 4% rally overnight, buoyed by investor confidence in AI-led growth.
The graphics chip titan closed at $170.03, just below its intraday high of $172.33, after opening at $171.88. The stock has seen consistent strength this month, climbing from lows of $157.69 on July 9 to consolidate near the $170 mark. While broader sentiment cooled, Nvidia’s momentum appears intact, offering a safe harbour in an otherwise choppy risk environment.
US CPI Pushes Dollar, Pressures Fed Cut Odds
Fueling the mixed risk tone was Tuesday’s U.S. CPI report, which showed headline consumer prices rose 0.3% in June—the highest gain since January. The figure landed in line with expectations, but the composition of inflation told a different story.
Goods categories like coffee, home furnishings, and electronics saw notable upticks—items directly in the crosshairs of Trump’s new tariffs.
With Fed Chair Powell having warned earlier this summer about delayed tariff effects, the June numbers now seem to validate those concerns.
As a result, traders began pulling back their rate cut bets, with market-implied pricing now showing just 44 basis points of easing for the rest of 2025. Odds of a September cut dropped to 56.5%, down from nearly 70% earlier in the month.
This shift also drove U.S. Treasury yields to fresh one-month highs and sent the dollar rallying against the yen, hitting levels last seen in early April.
Currency volatility has risen in tandem, underscoring the sensitivity to any further upside inflation surprises.
Technical Analysis
NVIDIA has pulled back slightly after tagging a local high of 172.33, but price action remains firmly supported above the 170.00 level. The 15-minute chart shows consolidation in a tight range with the 30-period moving average offering a solid floor.
Picture: NVIDIA holds 170 after a sharp rally, but consolidation may hide breakout or momentum face, as seen on the VT Markets app
Despite the minor retracement, the overall structure still leans bullish, especially with prior strong momentum off the 157.69 base.
However, the MACD is now showing bearish divergence—momentum is fading even as price holds near its peak—which may suggest exhaustion is setting in.
This cooling off aligns with broader tech market hesitation as traders digest earnings beats from major US chipmakers and brace for further guidance from Federal Reserve Chair Jerome Powell this week.
Watch for a breakout above 172.33 to re-establish bullish momentum, or a drop below 169.50 for potential downside acceleration.
Eyes on Producer Prices
Traders will now turn their attention to the Producer Price Index (PPI) due later in the day. Should factory-gate prices echo the CPI’s upward tilt, the Fed’s position could harden even further, putting risk assets under renewed pressure.
For now, though, Nvidia’s performance continues to defy gravity. In a market that’s second-guessing rate cuts, tariff impacts, and inflation stickiness, traders are still happy to place their chips on the kings of AI.
