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Nvidia announced earnings per share (EPS) of $1.30 adjusted, comfortably surpassing estimates of $1.25. Revenue also weighed in far above its $54.92 billion estimate, reaching $57.01 billion. 

The S&P 500 had been struggling to generate the same momentum that had caused the index to climb 14% over the first three quarters of 2025, having slipped 1% during the opening six weeks of Q4, but the positive earnings of its brightest stock could signal a reversal in fortunes. 

Nvidia’s market capitalization stands at $4.5 trillion, meaning that the AI superstar makes up around 8% of the S&P 500. It’s for this reason that the firm’s earnings have a profound effect on the US economy. 

Driving the AI Boom

Crucially, Nvidia appears to be building on its AI momentum. The firm expects to receive around $65 billion in sales during the current quarter, which would represent annual growth of 65%. 

The underlying figures seem to back these lofty ambitions up. Last month, Nvidia CEO Jensen Huang said that his company had $500 billion in orders for its chips across 2025 and 2026 combined. 

The S&P 500 had been muted in Q4 due to fears that much of the big money investments in AI are being driven by circular dealing, in which the landscape’s biggest players are using the same money to broker new agreements that invariably draw more investors in. 

Nvidia’s earnings have had a slightly negative impact on the dollar in the short term. The modest dip experienced by the Dollar Index (DXY) is down to a short-term revival in risk appetite among investors who may have become wary of a prospective AI bubble.

Although the S&P 500’s usual rate of growth has been slowing, Nvidia’s earnings demonstrate that AI leaders are continuing to grow significantly, and, provided that the company’s lofty expectations materialize, more investors will move away from the dollar to focus their enthusiasm on artificial intelligence once again.

Macroeconomics Take Charge

Prior to Nvidia’s earnings, DXY had recently emerged from a three-year low, climbing beyond 100 for the first time in six months, thanks to a clearing trade outlook and improving economic health in the United States. 

The improving outlook for the dollar in recent days was down to welcome new data from the Non-Farm Payrolls report for September, which showed that the economy had added 119,000 jobs. This metric far surpassed analyst forecasts of 50,000 and helped to drive more optimism towards the greenback.

Despite this, the hours after Nvidia’s announcement saw a small decrease in the dollar’s value relative to its international peers, falling towards resistance at 100 as traders took stock of the wider ramifications on Wall Street. 

But currency traders appear largely wrapped up in macroeconomic data on the world stage, which is causing wider volatility among traditional currency pairs. 

In the case of USD/EUR, the dollar’s recent growth was muted due to Producer Prices data coming out of Germany, which showed that PPI had changed -1.8% year over year in October, representing a slight improvement on forecasts of -1.9%. 

This suggests that currency traders are more interested in the short-term macroeconomic impacts surrounding pairs than the wider implications of artificial intelligence, with the dollar’s slight decline following Nvidia’s earnings announcement countered by optimism in jobs data. 

Interest Rates to Decide USD Fate

However, the Federal Reserve is likely to have the final say on where the dollar is headed in 2026. 

With Morgan Stanley analysts now expecting the Fed to cut interest rates in January, April, and June next year to bring the policy rate down to 3% to 3.25%, forex traders are now preparing for more weakness in USD as investors move away from the weaker rate of returns in favor of higher interest elsewhere. 

While Nvidia’s positive earnings spell good news for Wall Street as a whole, the implications of a weaker dollar could drive a more sustained downturn for the greenback in comparison to its peers, fuelling more investment and less saving. 

What’s Next for USD?

Early signs suggest that the US economy is on the road to recovery, which is good news for investors. Healthy returns from Nvidia, a recovering job market, and the expectation of more rate cuts are all catalysts for growth. 

However, economic growth and currency growth aren’t the same thing, and interest rate cuts could push the dollar to deeper lows in the future. 

The implications of a weaker dollar may provide more opportunities for forex traders, however. Timing the Fed’s rate cuts has already brought plenty of volatility in pairs like USD/EUR and USD/CNY, and these reactions to macroeconomic data could be ideal for traders seeking to react faster to breaking economic news.

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