Weekend Market Report: What a Week, The AI Trade Finally Blinked, and Busy Week Ahead

For three days, the market told itself a comforting story: NVDA’s problem is NVDA’s problem, and the money just moves down the street to $AMD and $AVGO. That story lasted until Friday morning.

Friday’s Tech Wreck

The rotation trade got unwound in a hurry. $AMD dropped nearly 9% and erased about $93 billion in market value in one session, with no downgrade and no news. That’s just people who bought Thursday hitting the sell button. $AVGO fell almost 5% after Redburn cut it to neutral and slashed its target from $595 to $398. $NVDA lost another 2%, hit new 52-week lows, and closed under a $4 trillion market cap after HSBC joined the downgrade parade. Between those three names, roughly $248 billion walked out the door.

It spread from there. $DELL fell 7% after a Bloomberg report traced servers carrying restricted chips to a Shanghai data center, and the Street started asking how much of its AI server business depends on $NVDA. $CSCO posted a beat-and-raise and got sold 6% anyway, because orders slowed. $AMAT was downgraded. $NBIS lost about 10%. The semiconductor index dropped more than 3%, and tech was the worst sector on the board, down at least 2%.

When a beat-and-raise gets you a 6% haircut, the market is telling you something about positioning.

Why It Happened

Three things. First, Jensen Huang’s resignation Thursday stopped being a one-stock story. NVDA has its fingers in the whole AI supply chain, and the China chip headlines keep getting worse. Second, supply. Anthropic prices its IPO Wednesday, 825 million shares at $70 to $78, and funds have to sell something to make room. Third, rates. Tuesday’s CPI came in hot, the 10-year closed the week at 5.15%, and the market now puts an 88% chance on a quarter-point Fed hike in December. Expensive growth stocks and a 5% ten-year have never been friends.

What Didn’t Break

Here’s the part that got lost in the wreckage. The $SPX fell only 0.4% Friday, and 315 of its members finished green. The equal-weight index was up. The Dow closed higher. Staples led. Money left AI hardware, but it didn’t leave the market.

And believe it or not, the SPX still gained 2.5% on the week, its best since August, almost entirely thanks to Monday’s 2.35% rip on easing Iran tensions. Even tech finished the week up about 3.3%. It gave back a big chunk in the last two sessions, which is why it feels the way it feels.

The Week Ahead

Friday was the warm-up. Next week is the main event.

Monday: Fed Chair Warsh speaks in the afternoon. With a hike nearly priced in, everyone is parsing every word.

Tuesday: Retail sales, HD and DIS before the open, then NVDA after the close with an interim CEO running the call. The Street wants about $2.47 a share on roughly $108.7 billion in revenue, and options are pricing a move of nearly 9% either way. The numbers will probably be fine. The succession and China questions are the trade.

Wednesday: TJX and LOW before the open, FOMC minutes at 2:00, a 20-year Treasury auction, PANW after the close, and the Anthropic pricing that night.

Thursday: WMT before the open and Anthropic’s first trade. A giant AI IPO two days after NVDA earnings is either perfect timing or terrible timing. We’ll know by lunch.

Bottom Line

Friday proved there’s no safe seat inside AI hardware right now. The names that ran because they weren’t NVDA got sold just as hard as NVDA. Until Tuesday night’s report is out of the way, this group trades on headlines, not charts. The good news is the rest of the market is holding up fine, and that’s where the cleaner setups are. Keep size reasonable, respect the 10-year, and let NVDA show its hand first.

Key Events This Week:

1. Fed Chair Warsh Speech – Monday 2. Home Depot $HD
Earnings – Tuesday 3. Disney $DIS
Earnings – Tuesday 4. US Retail Sales – Tuesday 5. Nvidia $NVDA
Earnings – Tuesday 6. Fed FOMC Minutes – Wednesday 7. Walmart $WMT
Earnings – Thursday 8. Initial Jobless Claims – Thursday 9. Anthropic $ANT
IPO – Thursday 10. UMich Consumer Sentiment – Friday

We are still in falling-knife territory on most Nasdaq names, but for now, some defensive charts that look real good are: WMT, MDLZ, and XEL.

See you in the Discord Monday morning.

— Joe

159 years ago today, the first stock ticker tape debuted… On November 15, 1867, the first stock ticker debuted in New York City, changing how quickly investors could follow the market. Developed by Edward Calahan, the machine transmitted stock quotes over telegraph wires and printed them on paper tape, earning its name from the ticking sound it made. Investors who had relied on messengers to deliver prices could now receive updates directly, making it easier to track trading beyond the exchange floor. It’s easy to take instant quotes for granted today, but 159 years ago, a strip of paper represented a major technological advance on Wall Street.