According to Reuters, Wall Street showed mixed results on Wednesday after the Federal Reserve cut interest rates but signaled uncertainty about further reductions. Nvidia reached a historic milestone by becoming the world’s first company valued at $5 trillion. Investors now focus on Thursday’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
Nvidia Reaches Record Valuation
Nvidia’s market value climbed to $5 trillion, just three months after hitting the $4 trillion mark. The chipmaker’s value has grown 12 times since ChatGPT launched in 2022. The company is now worth about half of the entire European Stoxx 600 index. UBS and Bank of America have raised their price targets for the stock.
CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the U.S. government. President Trump said he will discuss Nvidia’s Blackwell AI chip with Xi Jinping during their meeting. The company’s growth highlights its growing importance to U.S. power and national security.
Market Concentration Grows
The S&P 500 rose on Tuesday, but 398 of its companies fell. Analysts say this represents the worst market breadth for an up day since at least 1990. The equal-weight S&P 500 now lags the benchmark index by the widest margin since May 2003. A small group of megacap tech stocks continues to lift the broader market.
Fed Signals Caution on December Cut
The Federal Reserve lowered interest rates by 25 basis points as expected. Fed Chair Jerome Powell said another cut in December is not guaranteed. Wall Street reduced the probability of a December cut to 65% from 85% before the meeting. The Fed’s next meeting is in six weeks.
Major U.S. companies announced significant job cuts recently. Amazon revealed 14,000 layoffs, and UPS cut 48,000 jobs over the past year. Intel, Microsoft, and Accenture also announced thousands of cuts. The labor market appears to be shifting from no hire and no fire to no hire and more fire. This trend could support further Fed rate cuts, but officials face uncertainty due to a government shutdown blocking most labor market data.
