The Morning Brief
Futures are inching higher into a Fed decision that traders can't fully get comfortable with, even as Jensen Huang tells anyone who'll listen that the AI spending flywheel is "really, really flying."
The Fed decision is the whole ballgame today.
S&P 500 and Dow futures are up ahead of this afternoon's FOMC announcement, but the setup is shakier than the futures tape suggests: the Dow tumbled more than 300 points overnight and sentiment gauges remain stuck in "fear" territory. Gary Black argues a one-and-done hike could push Treasury yields lower and actually help stocks, while Ryan Detrick is out with a reminder that the S&P has historically delivered muted returns during Fed cycles that run more than five hikes deep. Desks are positioned for volatility around the 2pm decision and press conference, not before it.
AI capex optimism is fighting AI safety headlines for the market's attention.
WSJ reports OpenAI is considering a pre-IPO round at a valuation north of $1.2 trillion, and Huang is publicly dismissing any AI slowdown narrative, insisting labs don't need new rules and declaring "we're not going to die in 2030." A fund manager quoted overnight says the OpenAI and Anthropic slowdown chatter won't derail infrastructure demand across the chip complex. But the safety debate is getting louder in parallel: Zuckerberg is defending Meta's delay of its Muse product, Satya Nadella is calling on Xi Jinping to care about AI safety too, Bernie Sanders is warning tech CEOs to stop funding opposition to AI guardrails, and Bloomberg reports Trump advisers met with an Anthropic executive. China's state press is meanwhile accusing Washington of a "naked double standard" on AI chip distillation just as Trump and Xi head into a dinner where Huang himself will be a guest.
Chip supply chains keep shifting.
SK Hynix and Intel are reportedly in talks on a memory chip manufacturing deal in Ohio, part of the broader U.S. push to reshore semiconductor production. Watch both names at the open.
Crypto is the session's clearest loser.
Bitcoin, Ethereum, XRP and Dogecoin all sank overnight after the CLARITY Act failed to advance, compounding rate-hike anxiety. Coinbase's CEO says the industry "can't wait on Congress anymore," and separately Robinhood employees were charged over alleged misuse of confidential trading information tied to crypto futures.
Elsewhere:
Brookfield agreed to acquire Reliance Worldwide in an all-cash deal, Trip.com beat on both lines with adjusted EPS of $1.07 against a $0.91 estimate, D.R. Horton authorized a $5 billion buyback, and Seaport Global launched restaurant coverage, Buy-rated on Cava, Darden, Texas Roadhouse, Brinker, Yum and Dutch Bros, Neutral on McDonald's, Starbucks, Chipotle and Domino's. Premarket, Tempest Therapeutics and DataMEDS both spiked sharply while SOBR Safe fell hard after hours.
On the radar today:
the FOMC rate decision and Powell's press conference this afternoon, UK CPI already in at 3.1% year over year, Japan's wider-than-expected trade deficit, and continued headlines around the Trump-Xi meeting with Huang in attendance.
Bottom line: the Fed decision this afternoon will set the tone, but the tape is already split between AI capex conviction and mounting safety and regulatory noise.