Nvidia’s $5 billion investment in Intel backed by the administration marks a strategic shift from pure competition to cooperative “coopetition” in the AI industry. The deal gives Nvidia about 4% ownership in Intel and establishes joint development on AI infrastructure, blending Nvidia’s NVLink with Intel’s x86 to capture AI demand while reducing risk. This partnership reflects a broader trend where tech giants act simultaneously as competitors, suppliers, and partners—seen also in Microsoft, Oracle, Google, and Palantir’s overlapping AI alliances. Such interdependence creates a more stable but complex equilibrium, where long-term cooperation and reputation matter more than short-term wins. Ultimately, the AI industry is maturing into an ecosystem where success depends on positioning within circular revenue flows rather than dominating individual markets.
EQUITY
The Russell 2000 jumped 2.5% to its first all-time high since November 2021, since the Fed rate cuts build optimism around small-cap resilience. While the broader market also hit records due to deals between NVIDIA and Intel dragging AI-related stocks higher, consumer staples lagged, and falling oil prices hinted at underlying economic weakness.
GOLD
Gold rose in Asia, on track for its fifth weekly gain after the Fed’s expected 25-bp rate cut, which lowers the cost of holding non-yielding bullion. Prices pulled back on profit-taking as the dollar rebounded and Powell signalled caution, but analysts see a sustained uptrend driven by geopolitical risks, threats to Fed independence, and global de-dollarisation. Markets still expect deeper cuts than the Fed forecasts, and any erosion of central bank credibility could weaken the dollar and boost gold further.
OIL
Oil prices dipped Friday on weak U.S. demand but remained on track for weekly gains, supported by the Fed’s rate cut, which may boost future consumption. Geopolitical risks, including Russia-Ukraine tensions and resumed Kazakhstan exports via BTC pipeline, while Nigeria’s lifted emergency in its oil hub alleviated regional disruption. Analysts see limited upside as OPEC+ plans output hikes and U.S. fuel stockpiles swell even with Fed stimulus.
CURRENCY
The dollar rebounded on strong U.S. data in spite of Fed cuts, while the yen rose after the BOJ’s surprise 7-2 dissent hinted at an October rate hike. Political uncertainty in Japan and Trump’s pressure on the Fed cloud policy outlooks, even as global demand for Treasuries stays strong. Global equities rally post-Fed but face BIS warnings over debt-fuelled disconnect. Markets now watch Ueda’s cues and October Fed odds—priced at 90%.
