Wall Street Extends Rally on Rate-Cut Bets and AI Momentum as Gold Breaks Higher; Nvidia Slips on Hyperscaler Chip Threat
US equities advanced as investors leaned into easing monetary policy expectations and AI-linked mega caps, even as chipmakers were mixed on new competitive signals. Risk appetite held up across growth sectors, while gold extended a powerful six-month run and crypto-related shares outperformed despite a dip in Bitcoin.
Equities and AI Positioning The S&P 500 pushed higher on renewed rate-cut hopes and ongoing enthusiasm around artificial intelligence, with traders rotating into large-cap tech and select cyclicals. Market participants cited improving liquidity conditions and supportive yield dynamics as the Fed outlook shifted dovish, a backdrop that has historically underpinned duration-sensitive equities.
Apple was in focus amid reports of impending job cuts, part of a broader efficiency drive across Big Tech. Crypto miners surged as much as 20% in high-beta flows, reflecting aggressive positioning and short covering within the complex.
Nvidia Under Pressure as Hyperscalers Build AI Chips Nvidia shares eased after headlines that Google and Meta are accelerating in-house AI semiconductor efforts, with desks flagging a potential 10% revenue headwind if large customers shift more workloads to proprietary silicon. AMD traded lower in sympathy as investors reassessed competitive risks across the accelerator market. While near-term AI compute demand remains robust, concerns around long-term pricing power and mix weighed on the group.
Alphabet Nears $4 Trillion Threshold; Valuation Anxiety Surfaces Alphabet’s momentum in AI services and infrastructure continues to lift the stock, pushing the company toward a $4 trillion market capitalization. Some managers cautioned that prevailing multiples embed ambitious adoption and monetization curves, raising “AI bubble” questions even as earnings revisions trend higher. According to trading desks surveyed by BPayNews, portfolios remain overweight platform names but with tighter risk management given elevated implied equity volatility.
Chips and Hardware: AMAT Shines; INSP Pops on Reimbursement Applied Materials rallied on a constructive wafer fab equipment outlook, with investors citing backlog visibility and advanced node exposure. Meanwhile, Inspire Medical Systems (INSP) jumped after an increase in Medicare reimbursement rates, buoying sentiment toward select medtech names with pricing catalysts.
Crypto: Bitcoin Softens, Miners Rally; Coinbase Downgraded on Valuation Bitcoin slipped about 1% to near $87,000 as broader risk assets chopped intraday and crypto ETFs saw renewed outflows. The total crypto market cap was reported down roughly 24% over a recent stretch, though miners rallied sharply on momentum buying. Coinbase was downgraded on valuation grounds, with analysts pointing to a 39x price-to-earnings multiple versus peer ranges of 24x–27x, a gap seen as difficult to defend absent accelerating top-line growth.
Commodities: Gold’s Six-Month Surge Accelerates Gold extended its breakout, up roughly 21.8% over six months to around $4,100/oz, as investors sought duration hedges and diversification amid shifting policy expectations. Some desks cited continued central bank buying and geopolitical insurance bids even as ETFs posted outflows, highlighting the complexity of current liquidity flows. Goldman Sachs reportedly sees scope for $4,900 by 2026. Interest in Gold IRAs remains elevated, though advisors flagged high fees, liquidity constraints, and concentration risk as key considerations.
Autos: Tesla Rises Despite European Sales Slump Tesla shares gained roughly 7% after management emphasized autonomy and full self-driving optionality, offsetting a 48.5% plunge in European sales as competition intensifies. The market reaction underscores a valuation anchored increasingly in software, AI, and margin expansion potential rather than near-term delivery metrics.
Market Highlights – S&P 500 advanced as rate-cut probabilities firmed and AI leadership persisted. – Nvidia and AMD slipped on reports of hyperscalers accelerating in-house AI chips; revenue mix risk in focus. – Gold rallied to about $4,100/oz, up ~21.8% in six months; ETF outflows contrast with sustained demand narratives. – Bitcoin fell ~1% to near $87,000, while crypto miners surged up to 20% on momentum flows. – Coinbase downgraded on valuation (39x P/E vs 24x–27x peers); Applied Materials climbed on WFE outlook. – Tesla gained despite a steep European sales decline, with investors leaning into autonomy/FSD optionality.
Investor Q&A Q: What’s the main driver of the equity bid today? A: Rising confidence in Fed rate cuts is supporting risk appetite and growth duration trades, with AI leadership reinforcing the bid across mega caps.
Q: Why did Nvidia and AMD trade lower amid an AI-led tape? A: Reports of Google/Meta expanding in-house AI chips raised concerns about long-term pricing power and potential revenue share loss for third-party suppliers.
Q: Is gold’s rally flow-driven or fundamentals-driven? A: It’s a mix—central bank buying and risk hedging underpin fundamentals, while shifting rate expectations and tactical positioning amplify price moves despite ETF outflows.
Q: Why did Tesla rise despite weak European sales? A: The market is valuing Tesla more on autonomy/FSD potential and software monetization than near-term regional delivery softness, supporting the multiple.
