Tomorrow's stock market is set to open lower than the previous day. While NVIDIA's earnings provide a positive catalyst, the overall market's momentum remains limited, and defensive positioning centered on small- and mid-cap stocks is coming into focus.
The Nikkei 225 fell ¥130 on the 27th, reversing course after three sessions, and extended its gain to roughly 70% shortly after the open before ultimately slipping into negative territory. The daily candlestick was bearish, with the 75-day moving average capping the upside, while TOPIX posted a modest sixth consecutive gain. The Nikkei has declined on only 4 trading days so far in August, maintaining its underlying firmness.
NVIDIA's earnings showed revenue and net income more than doubling year on year, while its outlook for the August–October period was raised above market expectations. The company's shares rose more than 5% at one point in after-hours trading, prompting assessments that the results once again demonstrated the strength of demand related to generative AI. Meanwhile, Advantest was hit by profit-taking following preemptive buying, and Disco also traded lacklustre.
The market environment heading into September is becoming increasingly uncertain, and a stronger wait-and-see mood is likely as Fed Chair Warsh is scheduled to speak late on 28 August Japan time. Interest-rate volatility may persist amid uncertainty over overseas conditions, suggesting that individual investors will look to adopt defensive strategies centered on small- and mid-cap stocks.
Defense-related stocks including 豊和工業, 技研製作所 and 大日精化工業 have shown movement recently, and attention is focused on new catalysts and theme stocks as the market environment develops in September. The recently released schedule of domestic and overseas economic indicators includes the July unemployment rate, active job openings-to-applicants ratio and Tokyo CPI, among other data.