Wall Street has gone up this Friday (dow Jones:+1.08%; S&P500:+0.98%; Nasdaq:+0.88%) amid renewed optimism over interest rate cuts, as the president of the New York Federal Reserve (Fed), John Williamshas assured that he sees «margin for an additional adjustment» in rates. However, investors do not lose sight of the high ratings of artificial intelligence (AI) and fear the formation of a technology bubble. In it weekly calculationthe New York stock market has ended a bearish week in which the Nasdaq 2.74% has been left, the S&P 500 has given up 1.95% and the Dow Jones has fallen by 1.91%. And it is that the Nvidia’s strong quarterly results have not helped allay market fears with AI. «Most of the news will say that Concerns about AI spending and credit have resurfacedwhich is true,» says Ipek Ozkardeskaya, senior Swissquote analyst, who focuses on the chipmaker’s financials. «It began to be pointed out that Nvidia has accumulated large reserves of chipsin part because demand is shifting to its Blackwell platform generation, and in part because US export controls have left billions of dollars worth of H2O chips potentially unsaleable, forcing a multibillion-dollar depreciation,» she says. At the same time, as this expert comments, it has been said that Nvidia has been taking large advance payments from customers and recording them as revenue too soonbefore the delivery of the chips. «This is not illegal. It is a practice that may improve short-term results, but could lead to a shortfall if future orders decline.» «When you dig deep enough, you’re bound to find something shady. And people only start digging when they feel uncomfortable, and that discomfort is increasing. Market opinion is increasingly polarized between those who claim that this is a bubble and those who are willing to continue investing. I believe this dynamic will lead to greater volatility and large swings. It will be exciting,» remarks Ozkardeskaya. For their part, Bankinter explains that «The insecurity of the market regarding AI is noticeablewhich is good because it allows it to slow down towards the end of the year instead of entering the zone of excesses, taking into account the generous revaluations so far in 2025. «In this sense, they say that, although falls are never liked and even less so if they pick up speed, it is better that they occur now in November/December than to continue with rapid increases that end up inviting a strong correction.»Doubts about AI valuations continue to weigh and, although we insist that the hypothetical surcharges would be in the AI that is not yet listed (OpenAI, Mistral, Anthropic, XIA…) and not in the AI ecosystem that is listed (Amazon, Nvidia, TSMC, ASML, Netflix…), thoughtless fear sometimes leads to sudden corrections like yesterday’s. There is no need to be scared,» these strategists emphasize.
DOUBTS WITH THE FED CUTS
The other point of attention for investors is the Fed and, above all, the decision it makes at its next meeting in December. In this regard, a better than expected September employment report has lowered expectations of a new cut in the last monetary conclave of the year. «The creation of 119,000 jobs, well above what was expected, shows that the labor market is cooling, yes, but from a position of strength. The pull comes from health, restoration and social services, while manufacturing, transportation and federal employment are cut. It is the classic picture of ‘rotation’, not collapse. (…) The downside is that the Fed will be less in a hurry to lower rates aggressively.«, assesses Sergio Ávila, senior analyst at IG. «If the probability that the markets gave that the Fed would lower its reference interest rates again in December was very low, the significantly better than expected non-agricultural employment report for September practically made it investors ruled out this possibility completelywhich we also understand had a negative impact on the US equity markets,» they add in Link Securities. Likewise, it is worth remembering that the November report – the October one will not be published – will be released after the meeting of the Federal Open Market Committee (FOMC) in December, which will prevent its members from having this reference, «thus making it more feasible for choose not to move official rates in it, preferring to wait to have a more complete vision of the situation that the American labor market is going through,» these experts assure. What’s more, the CPI of the eighth month of the year will not be published either and the November one will be released on December 18. However, Williams’ latest words have revived optimism. «I keep seeing room for further near-term adjustment of the federal funds rate target rangein order to bring the monetary policy stance closer to the neutral range and, in this way, maintain the balance between the achievement of our two objectives. My opinions on monetary policy will be based, as always, on the evolution of the data set, the economic outlook and the balance of risks for achieving our objectives of maximum employment and price stability,» he assured at the Centennial Conference of the Central Bank of Chile.
ECONOMY AND OTHER MARKETS
Regarding the macro agenda, this Friday included the publication of the Manufacturing and services PMIs November preliminaries, which have shown a accelerated growth of the private sector American, as well as inflation expectations from the University of Michigan in its consumer confidence survey. In other markets, oil West Texas has decreased by 1.78% ($57.96) and the Brent has given up 1.48% ($62.44). For his part, the euro has depreciated 0.12% ($1.1511), and the ounce of gold has lost 0.08% ($4,056). Furthermore, the 10-year American bond yield has relaxed to 4.063% and the bitcoin has lost 2.34% ($84,426).
