AI Investment Surge Shows No Signs of Slowing
AdamSummary:
AI momentum is still strong. Nvidia now makes up a record share of the S&P 500, and Big Tech is boosting AI spending. The bull market continues, though risks from concentration remain.
The Fed flinches, the bull runs, and the AI boom isn’t slowing, with NVIDIA (NASDAQ:NVDA) claiming 8% of the S&P 500. Each week, the Syz investment team takes you through the last seven days in seven charts.
A Fed Cut, the End of Quantitative Tightening, Yet a Hawkish Shift in Tone
The Federal Reserve delivered a rate cut and announced the conclusion of its quantitative tightening programme. However, Chair Powell’s unexpectedly hawkish remarks prompted markets to sharply scale back expectations for a December rate cut. As a result, US Treasury yields surged, equities lost ground, and the dollar strengthened.
The decision to end QT may help alleviate near-term liquidity pressures and ease tensions in money markets. In the coming weeks, investors will closely assess how the Fed’s move, Powell’s cautious messaging, and upcoming liquidity indicators influence inflation expectations.
Given the current data gaps caused by the government shutdown, both policymakers and markets remain in a wait-and-see mode. As Powell underlined, another rate cut in December is “not a foregone conclusion – far from it."
This Bull Market Isn’t Young… but It’s Far From Done
It’s not a newborn rally learning to walk, nor an aging one losing steam. We’re firmly in the middle of the cycle, where things usually get intriguing.
As the saying goes, “Bull markets don’t die of old age. They die from recessions or Fed tightening.”
For now, neither seems to be looming on the 2026 horizon.
Bottom line: The market’s rally isn’t over, it’s simply moving at a more measured, confident pace.
NVIDIA’s Market Cap Now Makes Up a RECORD 8% of the S&P 500’s Total Value
Nvidia continues to break records. Last week, its market capitalisation surpassed $5 trillion, representing roughly 16% of US GDP. The company now makes up 8% of the S&P 500, a concentration not seen since the 1970s.
To put things in perspective, Nvidia’s valuation exceeds the entire economies of Japan and India, and it’s closing in on Germany’s GDP.
Such US Equity Market Concentration Has Almost NEVER Happened
Nvidia now dominates the S&P 500, accounting for 8% of its total market value, the highest share ever held by a single company since the 1970s. Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) follow at 6.5% and 6.0%, respectively. Together, the top ten stocks now command a record 40% of the entire index.
Big Tech Just Confirmed It: The AI Spending Boom Is Still on Fire
This week’s results from the Magnificent 7 confirm that AI-related CapEx is set to accelerate well into 2026, fuelled by structural, long-term demand that shows no sign of cooling.
Far from being a subplot, this spending surge is the main driver of the current bull market.
The key question now: will the rumored OpenAI IPO signal the top of the AI cycle or ignite its next powerful leg higher?
Gold Share of Global Investable Assets Is Way Off the Peak of the 1980s
Over the past two years, gold’s share of global investable assets has risen from 4% to 6%, its highest level since 1986.
For context, during the 1980 gold bubble, that share peaked at 22%, before collapsing to just 1% two decades later, in 2000.
Walmart’s Winning Formula
This fall, Walmart’s (NYSE:WMT) transformation will be studied at Harvard Business School as a case study on corporate reinvention.
In 2015, the company made a bold but necessary move, raising wages for nearly half of its one million hourly employees. High turnover, weak morale, and slipping customer satisfaction were eroding performance.
Investors initially reacted negatively, sending the stock down 10%. Yet since then, wages have risen 48%, fuelling a more engaged workforce, stronger customer experience, and an impressive 450% increase in Walmart’s share price.
Source: investing
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