NVIDIA JUST REIGNITED THE AI TRADE, BUT CAN THE FED KILL THE PARTY?
NVIDIA DELIVERED. BIG TIME.
$NVIDIA(NVDA)$ just reminded the market why it remains the most important stock in the world. +8.7% in one session. $NASDAQ(.IXIC)$ +1.57% and $S&P 500(.SPX)$ +0.72%.
NVDA
The company beat earnings and revenue expectations, but the real bombshell was the outlook. Nvidia expects revenue growth of roughly 70% in fiscal 2028, versus analyst expectations of around 45%.
That changes the conversation. The AI trade wasn't dead. It was waiting for proof.
AI IS BACK, BUT THIS TIME IT'S SPREADING
The most interesting part wasn't even Nvidia. It was software. $iShares Expanded Tech-Software Sector ETF(IGV)$ 7.4%.
IGV
$Salesforce.com(CRM)$ exploded +22.6% after strong earnings and a deeper partnership with Anthropic.
AI may not destroy software. AI may actually make the strongest software companies MORE valuable.
That is a major shift in positioning. For months, investors feared AI agents would replace traditional SaaS businesses. Now we're seeing something different:
AI labs + software companies = collaboration rather than cannibalization.
BUT HERE'S THE PROBLEM
Only one of the S&P 500's 11 sectors gained yesterday. $Technology Select Sector SPDR Fund(XLK)$
That tells us something important. This wasn't a broad-based risk-on rally. It was largely an AI/tech repricing event.
And that makes today extremely important. Because Nvidia may have reignited the bullish narrative…
but Kevin Warsh gets to decide whether the market can keep running.
THE FED IS NOW THE CATALYST
Fed
Warsh speaks today at Jackson Hole. And markets desperately want one thing:
CLARITY.
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Will the Fed tolerate sticky inflation?
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Will rates remain restrictive?
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What would trigger a rate hike?
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And perhaps most importantly:
How will Warsh react if inflation refuses to return to 2%?
The market has been pricing in optimism. But optimism is fragile when the 10-year yield is around 4.7% and the 30-year is still above 5%.
That's the debate.
What matters more for the next leg of this market?
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A)Nvidia's AI growth
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B) Fed policy & Treasury yields
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C) Both and one cannot survive without the other
Drop A, B or C below.
Sound off in the comments.
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
[Salute]
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