"Investors barely flinched Wednesday, despite the release of the Fed minutes and the ongoing U.S. government shutdown. Discussions on rate cuts and shutdowns seemed to be mere background noise compared to the real force moving markets now, namely, artificial intelligence. AI stocks such as Nvidia are now masters of the market narrative, driving record highs across the S&P 500 and Nasdaq."
"But, to paraphrase Spider-Man, with great power, comes great scrutiny. The Bank of England warned that valuations appear "stretched," particularly for AI companies, adding that equity markets could be particularly exposed should expectations around the impact of AI become less optimistic. For now, Wall Street remains in hyperdrive, fueled by AI's promise and the hope that the Fed will keep cutting rates. Investors may soon need to reckon with whether this AI-fueled rally is built on solid ground or it's swinging toward a cliff."
Artificial intelligence stocks, led by Nvidia, are driving record highs across the S&P 500 and Nasdaq and eclipsing Fed minutes and a U.S. government shutdown. Oracle’s weakness interrupted a seven-day S&P 500 winning streak. The Bank of England warned that valuations appear "stretched," particularly for AI companies, and that equity markets could be exposed if AI expectations become less optimistic. Federal Reserve officials in September were strongly inclined to lower interest rates, with meeting minutes indicating about two cuts expected by end-2025. A first-phase plan between Israel and Hamas included commitments that all hostages would be released and Israel would withdraw forces to an "agreed upon line." Nvidia’s CEO expressed surprise at an AMD-OpenAI deal structure.
Read at www.cnbc.com
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