Google Shakes Up the AI Race

Mixed Close – Stocks ended higher as the Dow jumped 663 points while the S&P 500 and Nasdaq advanced steadily on broad gains in health care and consumer sectors.

Tech Drag – Weakness in mega cap semiconductors weighed on the Nasdaq as investors reassessed high growth valuations ahead of key earnings and inflation data.

Consumer Boost – Retail names outperformed after stronger sales trends hinted that household spending held up well despite the slowdown in September’s official retail report.

TPU Interest – Alphabet climbed on reports that Meta is evaluating Google’s next generation TPUs for large scale AI workloads, signaling a potential shift in the competitive landscape.

Competitive Reset – Nvidia sold off as the possibility of Meta diversifying its compute suppliers sparked concerns that future hyperscale demand may be split across more players.

Supplier Upside – Broadcom rallied sharply as expectations grew that Google’s expanding custom silicon efforts would translate into larger long term ASIC orders.

Peace Talks – Ukraine agreed to a revised 19 point U.S. backed peace proposal while Russia awaited full details, marking a significant step toward potential negotiations.

Diplomatic Push – President Trump said U.S. envoys held simultaneous meetings in Moscow and Geneva to accelerate progress as missile strikes continued in Kyiv.

Fed Blind Spot – Policymakers now approach the December meeting with limited October data due to the shutdown, increasing uncertainty around the path of rate cuts.

Rate Cut Bets – Bitcoin rose 1.2 percent to 87,191 dollars as traders priced in a roughly 77 percent chance of a December rate cut following supportive remarks from multiple Fed officials.

ETF Caution – Crypto’s rebound lagged equities as institutional flows remained negative and Bitcoin ETFs logged a fourth straight week of outflows.

Retail Fragility – Sentiment stayed fragile after October’s flash crash and nearly 20 billion dollars in liquidations that continue to constrain risk appetite.

Tariff Pressure – UBS said tariff driven price increases have lifted inflation between 24 and 70 basis points since early spring with more to come before core PCE peaks next year.

Market Path – Capital Economics noted that equities often outperform even when the Fed cuts less than markets expect, reflecting underlying economic strength.

Long View – UBS expects core PCE to stay above the Fed’s 2 percent target until 2027 as tariff effects and slow price normalization keep inflation elevated.

Apparel Momentum – Abercrombie and Kohl’s raised profit guidance after strong back to school and fall season demand supported healthier margins and faster inventory turnover.

Tech Resilience – Best Buy beat expectations as cooling inflation helped stabilize big ticket categories like appliances and home electronics.

Sporting Goods Strength – Dick’s Sporting Goods delivered upbeat commentary on full year demand trends even as its quarterly results fell short of analyst forecasts.

AI Balance – Use weakness in $NVDA ( ▲ 1.37% ) and $AMD ( ▲ 3.93% ) to increase exposure to durable AI infrastructure winners like $AVGO ( ▲ 3.26% ) and $MSFT ( ▲ 1.78% ) that benefit from multiyear cloud investment.

Retail Exposure – Add selective retail names such as Best Buy or Abercrombie after improved guidance signaled stable consumer demand even as economic data remains uneven.

Crypto Patience – Build Bitcoin exposure slowly through dollar cost averaging until ETF flows stabilize and volatility around rate expectations settles.

Cash Edge – Maintain strong cash or treasury bill allocations to buy high quality assets on dips as the Fed approaches its final meeting of the year with limited fresh data.