So here we are again, folks. The market had another one of its dramatic episodes last week, clutching its pearls over AI valuations like your aunt discovering TikTok. But guess what? U.S. futures decided to shrug it off and climb higher Sunday night, because apparently Wall Street has the attention span of a goldfish with ADHD.
Let’s break down this soap opera: The three major indexes all closed lower last week after Fed Chair Jerome Powell basically said “stocks are kinda pricey, just saying” – which is Fed-speak for “maybe we’re all living in a fantasy land.” The S&P 500 dropped 0.3%, the Nasdaq fell 0.7%, and the Dow dipped 0.2%. Not exactly apocalyptic, but enough to make everyone nervous.
The real drama? Everyone’s suddenly worried about AI being overhyped. I know, shocking revelation – tech might be overvalued! Who could have seen this coming? (Besides literally everyone who lived through the dot-com bubble, but whatever.)
The poster child for this anxiety is Nvidia’s $100 billion partnership with OpenAI, which some analysts are calling “circular” – basically, it’s like lending your friend money so they can pay you back. Wall Street’s getting suspicious of these AI deals that look suspiciously like financial musical chairs.
But here’s the thing about markets – they’re bipolar. One day it’s “AI will destroy us all!” and the next it’s “AI will save us all!” Sunday night futures were up across the board: Nasdaq 100 futures climbed 0.39%, Dow futures rose 0.27%, and S&P 500 futures gained 0.31%. Because apparently sleeping on it fixed everything.
What actually helped calm nerves? Good old-fashioned economic data. August’s Personal Consumption Expenditures (PCE) – the Fed’s favorite inflation measure – came in exactly as expected. Consumer spending also beat estimates, rising 0.6% versus the expected 0.5%. Translation: Americans are still spending money like it’s going out of style, which is weirdly reassuring.
Looking ahead, we’ve got the jobs report coming Friday, which is basically the market’s monthly therapy session. Everyone will obsess over whether unemployment ticked up or down by 0.1%, as if that determines the fate of civilization.
This week’s earnings lineup includes some heavy hitters: Jefferies, Carnival (because apparently cruise ships are still a thing), Nike (swoosh!), and Conagra Brands (the people who make your frozen dinners slightly less depressing).
The bottom line? Markets are doing what they do best – overreacting to everything, then overreacting to their own overreaction. AI might be overhyped, or it might revolutionize everything. Powell might be right about valuations, or he might be the guy who called the party too early.
What we know for sure is that futures are green, consumer spending is solid, and inflation is behaving. In market terms, that’s basically winning the lottery. So maybe, just maybe, we can all take a deep breath and remember that the world isn’t ending every time someone mentions “bubble” and “AI” in the same sentence.
Now if you’ll excuse me, I need to go check if my AI chatbot can predict tomorrow’s market moves. For research purposes, obviously.