Global Tech Market in August and September: A Comprehensive Window for Asset Repricing

From a medium-to-long-term perspective, the market phase in August and September this year is highly distinctive. The market will rapidly transition from the summer's low-liquidity lull into a window driven by high-density events. Core pricing variables—including AI industry sentiment, Federal Reserve interest rate policy, US employment and inflation data, election policy expectations, and global tech capital expenditure—will converge, directly driving the valuation restructuring of global tech assets.

1. Characteristics of the August Slump: Low Liquidity, High Volatility

August is traditionally a slow trading period on Wall Street, with institutional traders and fund managers taking concentrated vacations, leading to shrunk market volume and insufficient trading depth. This core characteristic brings a key market pattern: low trading volume does not mean a lack of market action; instead, it tends to amplify price volatility.

In a normal liquidity environment, large capital inflows and outflows are adequately absorbed by the order book, resulting in stable market trends. However, when liquidity is thin during the slump, even capital flows of similar magnitude or a single piece of breaking news can trigger rapid price swings and quick repricing in tech stocks. Indices also frequently experience breakouts without significant volume and exhibit extreme volatility.

However, the end of August this year completely shattered the typical dullness of the slump. The consecutive release of NVIDIA's earnings report, the Federal Reserve's Jackson Hole Annual Economic Symposium, and key US inflation and employment data created a unique market environment characterized by low liquidity combined with high information density. This implies that market volatility will continue to rise in the near term.

2. NVIDIA Earnings Report on August 26: The Core Bellwether for AI Capital Expenditure 📶

The core catalyst for this August's market movement was NVIDIA's Q2 FY2027 earnings report released on August 26. NVIDIA is no longer just an individual stock target; it has become the core observation window for the global AI capital expenditure cycle.

Over the past two years, overseas tech giants such as Microsoft, Google, Amazon, and Meta have continuously increased their investments in AI infrastructure and data centers. The demand, orders, and overall prosperity of the entire supply chain ultimately converge on the core GPU segment, with NVIDIA serving as the central hub of this industry chain.

The market's focus for this earnings report is not merely on the extent to which single-quarter revenue and EPS exceed expectations, but rather on four core issues: whether demand for Blackwell orders continues to grow strongly, the visibility of orders for next-generation products, the intensity of capital expenditure expansion by top cloud providers, and management's outlook on medium-to-long-term AI computing power demand.

Two Core Earnings Scenarios Determine the Direction of the Semiconductor Cycle

1. Both Results and Guidance Significantly Beat Expectations: This would validate that AI capital expenditure by overseas tech giants has not peaked and that data center construction continues to expand. Demand will transmit upstream, driving up prosperity across the entire industry chain, including HBM, advanced packaging, optical modules, servers, PCBs, and semiconductor equipment, thereby thoroughly repairing the market's pessimistic expectations for the semiconductor cycle.

2. Strong current performance but weakened future guidance: This indicates that top-tier clients are slowing the pace of their AI investments. The market will not overextend on current positives; instead, it will price in expectations of a future downturn in prosperity ahead of time, thereby suppressing valuations across the entire tech sector.

In short, the core takeaway from NVIDIA's earnings report can be summarized in one sentence: Can global AI capital expenditure continue to rise? This is the fundamental logical support for the semiconductor and technology sectors in the second half of the year.

3. Two Core Pricing Variables: Industry Profits + Cost of Capital 💎

NVIDIA's earnings report corresponds to the industry profit side, while Federal Reserve policy corresponds to the cost of capital and valuation side. These two are the core variables determining the trend of high-growth tech stocks, and neither can be ignored.

The most favorable environment for tech stocks occurs when dual tailwinds resonate: sustained high growth in AI industry profits combined with falling US Treasury yields and valuation expansion. This would drive a trend-like rise in the Nasdaq and leading tech stocks.

Meanwhile, the most typical market divergence stems from variable背离 (divergence):

1. Improving profits, rebounding inflation, and rising interest rates: While corporate fundamentals remain sound, high interest rates suppress valuation discounts, leading to stagflation where "earnings are strong but stock prices fail to rise." This is a signal warranting more caution than outright bearish news;

2. Economic recession accompanied solely by rate cuts: Rate cuts cannot offset deteriorating corporate profits, making it difficult for tech stocks to sustain a bullish trend.

Therefore, the core focus of subsequent market博弈 (gaming/strategic interaction) is not simply expectations of rate cuts, but whether the US economy can achieve a soft landing. Economic resilience, steadily declining inflation, gradually falling interest rates, coupled with high AI prosperity, constitute the golden environment for a tech stock rally.

4. September Market Outlook: Data-driven, with expectations shifting repeatedly

Entering September, the market's core narrative has shifted from corporate earnings to macroeconomic data. The consecutive release of US employment, CPI, and PCE inflation data will directly determine the Federal Reserve's policy path, leading to repeated shifts in market expectations:

- 🔘 Weakening employment figures trigger trades betting on rate cuts;

- 🔘 A rebound in inflation drives US Treasury yields higher rapidly, suppressing tech valuations;

- A moderate decline in both employment and inflation validates the most bullish soft-landing scenario.

Tech stock valuations are highly sensitive to interest rates, which is why Nasdaq performance cannot be judged solely by corporate earnings: earnings represent the numerator of stock prices, while interest rates represent the denominator. When both improve simultaneously, the market rises smoothly; when earnings improve but rates worsen, the sector is prone to volatility and stagnation.

V. Front-running the Q4 Game: US Midterm Elections 🙌

The US midterm elections on November 3 will become a key new variable driving Q4 market performance. Investors need not dwell on the conventional wisdom that "elections inevitably lead to declines"; the core play is on policy uncertainty.

With multiple variables intertwining—US fiscal policy, tariffs, tech regulation, and AI industrial policy—the election results will directly impact future tax, fiscal, trade, and regulatory rules, ultimately transmitting to corporate earnings and market interest rates:

- Fiscal stimulus boosts economic earnings but tends to push up inflation and interest rates;

- Fiscal contraction alleviates inflationary pressure but drags down economic growth.

The midterm elections do not present a clear bullish or bearish signal; instead, they will trigger a new round of probabilistic reassessment for asset pricing in the fourth quarter.

6. Full-Cycle Timeline: A Series of Repricing Tests ⚠️

Over the next three months, the market will undergo progressive logical validation, with each milestone serving as a pricing correction:

1. Late August: NVIDIA earnings report, validating the sustainability of AI demand;

2. August–September: Jackson Hole Annual Symposium + macroeconomic data, validating the economic soft landing and the Fed's room for easing;

3. October: Q3 earnings for tech and semiconductor sectors, validating whether AI capital expenditure translates into actual profits;

4. November: Midterm elections, pricing in policy and fiscal uncertainty.

All variables ultimately converge into the core pricing logic for tech stocks: AI industry profitability, cost of capital, and the policy environment.

⭕️ Key Takeaway: Beware of diverging variables; embrace structural repricing

August and September are not merely simple cycles of gains and losses, but a window for systemic repricing of global tech assets.

The core risk in the current market is not driven by any single negative event, but rather by the concentrated interplay of multiple key variables: the sustainability of AI capital expenditure, the Federal Reserve's interest rate balancing act, the commercialization capabilities of tech firms, and US policy uncertainty. These factors, compounded by weaker liquidity in August, have further amplified market volatility.

There is no need to preemptively predict price movements or rigidly define market trends; instead, focus closely on core divergence signals:

Whether industrial fundamentals, corporate earnings, market interest rates, and stock price trends are aligned.

If multiple logical drivers improve simultaneously, short-term corrections will not alter the long-term trend;

If earnings improve but valuations continue to weaken, accompanied by a divergence between volume and price, it suggests the market is shifting from fundamental-driven trading to valuation compression trading. This could lead to a deep valuation restructuring for global tech assets.

NVIDIA's earnings report on August 26 serves as the first critical test in this months-long market examination.

$NVIDIA (NVDA.US)$

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