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Markets took a decisive turn higher after Chair Powell signaled that policy “may warrant” adjustment as labor cools and inflation risks moderate. Futures priced a high probability of a September rate cut, Treasury yields fell across maturities, and equities ripped. Multiple live feeds captured the swing in real time: the S&P 500 moved higher as Powell spoke, the Dow logged an all-time high, and several reports highlighted a synchronized risk rally in stocks and crypto. Traders lifted odds of a near-term cut to more than 80 percent on CME FedWatch data, while global bond markets followed with U.K. gilt yields slipping.

News flow shows the breadth of the move. Headlines called out a Powell-led stock market rally, the S&P 500’s third straight weekly gain on rate cut hopes, and a broad bid in rate-sensitive groups. “Top Midday Stories” and “Market Minute” recaps linked the surge to Powell’s Jackson Hole remarks. Crypto proxies exploded higher, with Coinbase (COIN) and Strategy (MSTR) gaining as Bitcoin and Ethereum advanced after the speech. Post-close recaps pointed to a powerful small-cap and cyclicals catch-up as investors rotated away from narrow leadership.

Semiconductors and AI infrastructure were early leaders. One wire noted “Nvidia, Broadcom, AMD Lead Chip-Sector Rally on Rate-Cut Hopes.” Citigroup reiterated a Buy on Micron with a 150 dollar target, citing AI memory demand. TD Cowen lifted Nvidia’s target to 235 dollars with a Buy rating and Cowen and other brokers argued Nvidia still screens as the best AI play despite China noise. Analog Devices reported a strong quarter with revenue up nearly 25 percent and raised guidance, helping high-quality analog peers. Super Micro updated its data center share ambitions and Vertiv drew a fresh Buy and target hike from Morgan Stanley on order strength and backlog support. Offsetting the euphoria, Nvidia’s reported halt of H20 production for China and continuing export-control risk injected a dose of selectivity into the trade.

Cloud software showed durable demand and operating leverage, reinforced by catalysts. Zoom delivered a clean beat with revenue up 4.7 percent, EPS ahead of estimates, and raised full-year guidance; shares jumped double digits. Salesforce expanded its public sector push and set up AI agents for government workflows. Zscaler and CrowdStrike deepened an AI SOC partnership. Buyers rewarded cash return discipline as CrowdStrike authorized a 1.3 billion dollar buyback. Several analysts reiterated Overweight calls on Microsoft and Alphabet, while Meta inked a 10 billion dollar cloud pact with Google that validates hyperscale AI spend and multi-cloud strategies.

Rate-sensitive assets responded immediately. Home improvement and homebuilders rallied on the drop in yields. Home Depot climbed briskly during the Dow’s 850 to 900 point surge, and builders like Lennar and D.R. Horton were bid as investors repriced mortgage affordability. Mortgage REIT coverage noted the lowest mortgage rates of 2025 and flagged income opportunities among high yield names. Property and data center REITs benefited from lower discount rates and secular AI power demand. BMO reaffirmed Digital Realty as a top pick, and analysts stayed constructive on Equinix bookings momentum, even after shares lagged year to date. Realty Income’s dependable monthly dividend drew income buyers, and Simon Property Group announced a wellness partnership that leverages foot traffic and data to drive retailer engagement.

Financials climbed with risk appetite. JPMorgan, Goldman Sachs, Morgan Stanley, and brokers rallied as equity capital markets, trading, and advisory prospects brighten in an easier policy regime. Uber featured on “stocks near buy points” lists alongside JPMorgan and RTX. Options strategists noted rising use of vanilla SPX put spreads and resettable puts to hedge gains, consistent with extended positioning and looming catalysts like PCE and Nvidia earnings.

Consumer signals were mixed, underscoring the importance of selection. Walmart’s top line remained strong and management raised full-year guidance as advertising growth offered cushion against tariffs, but an EPS miss and liability claims elevated noise. Ross Stores beat on EPS yet highlighted an 11 cent quarterly headwind from tariffs, with analysts expecting the pressure to fade into year end. BJ’s Wholesale Club delivered record membership but saw comps negative including fuel due to lower retail fuel prices; ex fuel comps rose 2.3 percent on traffic strength. Chipotle continued to innovate with drone delivery pilots and brand partnerships, though sales mix and elasticity remain in focus. Ulta received an upgrade on improving fundamentals under new leadership. Nike pushed into trail performance and China outdoor categories while analysts flagged near-term brand and margin risks.

Travel and leisure snapped back. American Airlines and MGM jumped with the broader rally as consumers and corporate travel stand to benefit from lower financing costs and improved confidence. Carnival and Royal Caribbean continued to screen attractively on valuation versus growth as forward booking commentary improved. Booking Holdings neared a buy point after a strong weekly move and resilient travel demand data.

Industrials and transports rallied with cyclicals. Caterpillar gained strongly during the Dow melt-up and announced a 1 gigawatt data center power program with Hunt Energy starting in Texas, a clear tie-in to the AI power supercycle. Rails got a catalyst as CSX and BNSF unveiled new coast-to-coast intermodal services linking Southern California to key Southeast markets, while Union Pacific and Norfolk Southern developments kept transcontinental themes in focus. Defense remained bifurcated: Lockheed drew caution on growth and execution, but Raytheon won a contract multiple times larger than Palantir’s biggest award, showing the heft of combined hardware and software in defense spending.

Energy saw a nuanced bid. Integrated oils stayed supported by strong free cash flow and distributions, while midstream names such as Kinder Morgan and MPLX offered yield, fee-based stability, and less commodity sensitivity as rates fell. Utilities with clean power exposure rallied. NextEra gained with commentary highlighting its balanced generation mix, ROE expansion, and AI data center power demand tailwinds.

Digital assets and proxies ripped higher as Powell spoke. Coinbase and Strategy gained as Bitcoin and Ethereum advanced, with multiple wires calling out a post-speech rally and a rotation to high beta. Coinbase analysts outlined a 1.2 trillion dollar stablecoin TAM view by 2028 and reiterated the long runway in infrastructure services. Traders warned that crypto volatility can reverse quickly, so position sizing discipline remained a theme.

Sectors positively exposed to lower rates and a risk-on tilt

• AI infrastructure and semis: Nvidia, Broadcom, AMD, Micron, Analog Devices, Super Micro, Vertiv, Arista. Strong order books meet a lower discount rate. Watch China exposure for Nvidia’s China SKUs.
• Cloud and cybersecurity: Zoom beat and guided up. Salesforce, Zscaler, CrowdStrike partnerships show durable enterprise demand and AI monetization. Option to own cash generators with improving margins.
• Homebuilders and housing ecosystem: Home Depot, Lowe’s, Lennar, D.R. Horton, mortgage REITs. Lower yields improve affordability and refi optionality.
• REITs and infrastructure: Digital Realty, Equinix, Realty Income, Simon Property, data center suppliers. Lower rates and AI power demand support capex and valuations.
• Financials and brokers: JPMorgan, Goldman Sachs, Morgan Stanley, exchanges. Easier policy can lift deal flow and trading revenues, though NIMs warrant monitoring.
• Travel and leisure: American Airlines, MGM, Carnival, Booking. Sensitivity to rates and consumer confidence favors a bounce.
• Utilities and clean energy: NextEra, Constellation. Long duration cash flows benefit as rates decline, with AI load growth an incremental driver.

Areas to be selective or cautious

• Tariff-exposed retailers: Ross quantified tariff cost headwinds and BJ’s comps including fuel showed softness. Walmart’s profit cadence reflected non-operating items. Focus on firms with ad networks, membership models, or private label strength.
• Export control risk in semis: Nvidia’s China H20 disruption headlines show policy risk. Balance AI exposure with diversified players like Micron and Broadcom.
• Defense primes with execution overhangs: Stock picking matters. Contrast Raytheon’s large award momentum with slower organic growth elsewhere.

Strategies to position into the theme

• Lean into duration sensitivity. Add to quality homebuilders and home improvement. Increase exposure to data center REITs and high quality triple-net REITs with long leases and rent escalators. Utilities with clear AI power catalysts can serve as lower beta beneficiaries.
• Barbell AI infrastructure and profitable software. Pair core positions in Micron, Broadcom, Analog Devices, and power systems enablers like Vertiv with selective winners in software and cybersecurity that are demonstrating operating leverage, such as Zoom and CrowdStrike. Use Nvidia as a core but hedge China risk with diversified peers.
• Rotate beyond megacaps. Several reports highlighted interest in the S&P’s forgotten 493. Use equal weight or factor tilts to capture breadth as cuts approach, while maintaining quality bias.
• Own midstream and high-quality energy income. MPLX and Kinder Morgan provide yield and steady fee-based growth, helped by lower rates and export projects. Use integrated oil selectively based on capital returns.
• Trade the travel rebound with risk controls. Consider baskets across airlines, hotels, and cruise lines rather than single-name concentration. Favor those with balance sheet improvement and positive booking updates.
• Hedge tactically. Bloomberg Intelligence derivatives strategists recommended vanilla SPX puts or put spreads over VIX as more reliable hedges in a buy-the-dip regime. Resettable structures can protect gains if the grind higher continues.
• Size crypto proxies prudently. Coinbase and Strategy offer high beta to Fed pivots, but volatility and regulatory risks argue for disciplined sizing.
• Monitor catalysts. Nvidia earnings and guidance will test AI sentiment. PCE will update the inflation pathway. Watch evolving tariff policy for retailers and continuing export control developments for semis.

Bottom line: Powell’s signal unlocked a classic risk-on day where duration trended, cyclicals caught a strong bid, and AI remained the market’s North Star. The data supports leaning into quality beneficiaries of lower rates and secular AI capex while managing known policy and margin risks in select retail and export-exposed tech. Breadth improves when the cost of capital falls. Position for that rotation, keep hedges live, and let earnings and cash flow discipline drive selection.

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