Fed's Interest Rate Divide and NVIDIA's Results Challenge the Boundaries of AI Enthusiasm

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Fed's Interest Rate Divide and NVIDIA's Results Challenge the Boundaries of AI Enthusiasm

Bitget-RWA2025/11/19 08:34

By:Bitget-RWA

- U.S. Fed minutes and NVIDIA's Q3 earnings will test AI optimism amid policy uncertainty and governance scrutiny. - Fed's October rate cut debate reveals internal divisions, while ethics probes into Kugler's trades raise transparency concerns. - NVIDIA faces $54.9B revenue test for AI chips, with market valuations hinging on its ability to sustain growth amid short-seller bets. - Strong NVIDIA results could reinforce AI sector momentum, while weak performance risks dampening tech stock enthusiasm.

This week, all eyes are on the U.S. Federal Reserve and

NVIDIA

as investors anticipate significant updates in both monetary policy and the artificial intelligence (AI) industry. The Fed will publish the minutes from its October meeting on Wednesday, providing a window into the central bank’s discussions about interest rates. At the same time,

NVIDIA's forthcoming earnings announcement

—widely regarded as a key indicator for the AI sector—could either bolster or challenge the current optimism on Wall Street.

Recent turmoil at the Fed has heightened the importance of these minutes.

Adriana Kugler, a former governor, stepped down

in August amid an ethics probe into stock trades that breached agency guidelines, including transactions during restricted periods. Her resignation paved the way for Stephen Miran, an ally of Trump, to join the board, raising concerns about the Fed’s internal oversight. The inspector general has confirmed that the investigation into Kugler’s financial disclosures—which included trades in firms such as Apple and Caterpillar—

is ongoing, according to reports

. This controversy has intensified scrutiny of the Fed’s transparency, with lawmakers like Senate Banking Chair Tim Scott calling for tighter oversight

as noted by analysts

The direction of Fed policy remains unclear. At the October meeting, the committee approved a 25-basis-point rate cut, but opinions were divided: Miran pushed for a 50-basis-point reduction, while Kansas City Fed President Jeff Schmid opposed any cut

as detailed in the minutes

Fed's Interest Rate Divide and NVIDIA's Results Challenge the Boundaries of AI Enthusiasm image 0

Currently, traders

estimate about a 50% probability

of another rate cut in December, down from 66% the previous week, as officials contend with mixed inflation signals and delayed economic data due to the government shutdown.

NVIDIA, now the world’s most valuable company, is also at a crucial point. The chipmaker’s third-quarter results, expected Wednesday, will gauge the strength of ongoing investment in AI infrastructure.

Experts project revenue of $54.9 billion

, a 57% increase from last year, fueled by demand for its Blackwell and Rubin AI chips. CEO Jensen Huang has

projected $500 billion in total revenue

by 2026 from both current and future products, surpassing Wall Street’s expectations. Still, doubts are growing. Notable investors such as Peter Thiel and SoftBank have sold their shares, while

short-sellers like Michael Burry are betting

against the company.

At the same time, the implications reach beyond NVIDIA itself. The company’s performance could either support or undermine the lofty valuations across the AI sector, which have soared on speculative enthusiasm.

Options trading suggests a possible $320 billion swing

in NVIDIA’s market capitalization, highlighting the high expectations. If earnings disappoint, it could dampen the broader excitement for AI-related tech stocks. On the other hand,

strong numbers could further cement NVIDIA’s leadership

as major cloud providers like Microsoft and Amazon expand their AI infrastructure.

This week’s economic agenda also includes important releases such as the September employment report and housing starts, but the main focus remains on the Fed and NVIDIA. With markets balancing policy uncertainty and AI momentum, volatility is likely to stay high.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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