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Nvidia's Record Earnings Couldn't Save the Market: Why Consolidation Is Part of the Game

MarketDash Editorial Team
13 days ago
Nvidia delivered record revenue and bullish guidance, but shares reversed after an initial pop. Market strategist Jay Woods explains why the chip giant couldn't play Atlas this time, and what contrarian indicators suggest about what's next.

Nvidia Corporation (NVDA) did everything investors hoped for: record revenue, record data center numbers, bullish guidance. The semiconductor giant checked every box. And yet, when the dust settled Thursday, shares closed down 7.8% from their opening price, and the broader market remained stuck in consolidation mode.

When Atlas Shrugs

Some investors had positioned Nvidia as the market's last great hope, the one stock capable of lifting the entire S&P 500 back to glory. Freedom Capital Markets Chief Market Strategist Jay Woods captured the sentiment perfectly in his weekly newsletter: "For those of us like myself expecting Nvidia to play Atlas and hold up this market realized that Atlas shrugged."

The results themselves were stellar. Woods called them "great," but the stock's behavior told a different story. After trading higher in Wednesday's after-hours session, Nvidia opened Thursday morning at $195.95. That opening price turned out to be essentially the high of the day at $196.00. From there, shares tumbled as low as $179.85 before closing at $180.64.

So much for new all-time highs. Nvidia had peaked at $212.19 on October 29, and Thursday's action made it clear that level won't be tested anytime soon.

Sideways for Now

Woods expects Nvidia to "trend sideways" and trade around its 50-day moving average going forward. He's watching $196 as upside resistance and $175 as downside support. The pattern isn't surprising if you've been paying attention to Nvidia's history.

"Given its history of great results followed by sideways price action, expect it to take weeks before resuming its trend higher," Woods noted.

Translation: patience required. The stock needs time to digest these levels before mounting another run.

Is This a Real Correction?

October 29 was a significant day for more than just Nvidia. That's also when the SPDR S&P 500 ETF Trust (SPY) hit its high of $689.70. With the S&P 500 now down over 5% from those heights, the natural question is whether we're looking at a normal correction or something more sinister.

Woods thinks it's the former. "Consolidation phases are normal and they take time and patience," he said.

He pointed out that 2024's market defied typical seasonal patterns. The historically weak August and September periods never materialized. Instead, the market racked up six straight months of gains, ignoring the usual script.

Contrarian Signals Flashing

Here's where things get interesting. Woods highlighted that consumer sentiment hit its lowest level in 2025, falling below readings from the Liberation Day selloff earlier this year. As a contrarian indicator, this worked beautifully in April when sentiment cratered right before a rally.

"That contrarian indicator worked well in April and is now triggered again. In fact, the only lower level recorded since last week was summer of 2022 – just months before the major bear market low," Woods explained.

There's another signal worth noting. Last week saw intense selling pressure, with over 80% of S&P 500 stocks trading below their 10-day moving average. This same condition appeared twice already in 2025, during the October and March/April lows. Both times, stocks rallied afterward.

Woods believes these extreme contrarian readings hitting simultaneously could signal that a rally is on the horizon. When sentiment gets this dark and technical conditions this oversold, the market often has a habit of surprising people on the upside.

For now, though, the strategy is following trends and practicing patience. Nvidia may have failed to play Atlas this time, but consolidation is part of the game. The question isn't whether the uptrend resumes, but when.

Back to News

Nvidia's Record Earnings Couldn't Save the Market: Why Consolidation Is Part of the Game

MarketDash Editorial Team
13 days ago
Nvidia delivered record revenue and bullish guidance, but shares reversed after an initial pop. Market strategist Jay Woods explains why the chip giant couldn't play Atlas this time, and what contrarian indicators suggest about what's next.

Nvidia Corporation (NVDA) did everything investors hoped for: record revenue, record data center numbers, bullish guidance. The semiconductor giant checked every box. And yet, when the dust settled Thursday, shares closed down 7.8% from their opening price, and the broader market remained stuck in consolidation mode.

When Atlas Shrugs

Some investors had positioned Nvidia as the market's last great hope, the one stock capable of lifting the entire S&P 500 back to glory. Freedom Capital Markets Chief Market Strategist Jay Woods captured the sentiment perfectly in his weekly newsletter: "For those of us like myself expecting Nvidia to play Atlas and hold up this market realized that Atlas shrugged."

The results themselves were stellar. Woods called them "great," but the stock's behavior told a different story. After trading higher in Wednesday's after-hours session, Nvidia opened Thursday morning at $195.95. That opening price turned out to be essentially the high of the day at $196.00. From there, shares tumbled as low as $179.85 before closing at $180.64.

So much for new all-time highs. Nvidia had peaked at $212.19 on October 29, and Thursday's action made it clear that level won't be tested anytime soon.

Sideways for Now

Woods expects Nvidia to "trend sideways" and trade around its 50-day moving average going forward. He's watching $196 as upside resistance and $175 as downside support. The pattern isn't surprising if you've been paying attention to Nvidia's history.

"Given its history of great results followed by sideways price action, expect it to take weeks before resuming its trend higher," Woods noted.

Translation: patience required. The stock needs time to digest these levels before mounting another run.

Is This a Real Correction?

October 29 was a significant day for more than just Nvidia. That's also when the SPDR S&P 500 ETF Trust (SPY) hit its high of $689.70. With the S&P 500 now down over 5% from those heights, the natural question is whether we're looking at a normal correction or something more sinister.

Woods thinks it's the former. "Consolidation phases are normal and they take time and patience," he said.

He pointed out that 2024's market defied typical seasonal patterns. The historically weak August and September periods never materialized. Instead, the market racked up six straight months of gains, ignoring the usual script.

Contrarian Signals Flashing

Here's where things get interesting. Woods highlighted that consumer sentiment hit its lowest level in 2025, falling below readings from the Liberation Day selloff earlier this year. As a contrarian indicator, this worked beautifully in April when sentiment cratered right before a rally.

"That contrarian indicator worked well in April and is now triggered again. In fact, the only lower level recorded since last week was summer of 2022 – just months before the major bear market low," Woods explained.

There's another signal worth noting. Last week saw intense selling pressure, with over 80% of S&P 500 stocks trading below their 10-day moving average. This same condition appeared twice already in 2025, during the October and March/April lows. Both times, stocks rallied afterward.

Woods believes these extreme contrarian readings hitting simultaneously could signal that a rally is on the horizon. When sentiment gets this dark and technical conditions this oversold, the market often has a habit of surprising people on the upside.

For now, though, the strategy is following trends and practicing patience. Nvidia may have failed to play Atlas this time, but consolidation is part of the game. The question isn't whether the uptrend resumes, but when.