Nvidia Printing Money as AI Spending Drives Semiconductor Gains

Published 09/10/2025, 20:15
Updated 09/10/2025, 20:20

For the trailing week, the Dow and Russell 2000 are back in the red. The market engine continues to be tech, in particular semiconductors, as for the week, the Magnificent 7 is flat, while semis are +2.7%, and the market-weighted S&P is flat for the week, while the even-weighted S&P is down 0.5%. NVIDIA is up 2.8% to yet another new high and now has a $4.7 trillion market value. While it’s uncertain when all the AI spending will generate a positive return on investment, there’s little doubt that the companies supplying the hardware to get them built will be printing money in the short term. 

This morning, we saw a risk-off sentiment where the only 3 sectors in the green are the defensive consumer staples, utilities, and healthcare. Crypto is also swooning. The VIX shot up above 17 into the open. It appears to be a bit of profit-taking, which we’re also seeing in gold and silver, even in Treasury bonds. This is a normal market action and not concerning. 

The government shutdown continues, with the IRS laying off almost half of its workforce. The Senate has now rejected 6 proposals for ending it. The blackout of economic data continues, though alternate sources continue to reflect a weakening labor market. The Fed minutes revealed that while the September rate cut was nearly unanimous, further cuts are more mixed. Market bets on an October cut have moved up to 99%, while December has dropped to 78%. 

Delta Airlines (DAL) had beats top and bottom (albeit decreases y-o-y in revenues, earnings and cash flow) and bullish guidance. It was notable that they reported 8% increases in business travel 3Q vs 3Q, and 9% growth in premium travel, while overall domestic travel was up 2%. This reflects a strong, well-off consumer as well as corporate profitability. The shares are up 5% today, down 0.9% YTD. 

As the trading day marched on, we saw a repeat of a familiar pattern where stocks open in the green, then slump for the next couple of hours, and then motor back into the green, which seems to correlate with the close of the European markets.

Gold and silver have marched to new highs today. Copper is flat. Crude oil is up 1% to $62.30/bbl, the high for October, and natural gas is flat but up 9.2% for the trailing month. Nevertheless, energy is lower today. The US dollar index has clawed its way back to 98.5, a one-month high. Crypto remains soft with Bitcoin at $122.5K and Ethereum down 2.7%. The gold stocks I recommend are: AEM, AGI, CDE, CMCL, EGO, IDR, KGC, NGD, OR and SSRM.

AI remains the primary theme in the positive trend, with the strength in gold seen as a somewhat disturbing development, reflecting a lack of confidence in central banks and fiat currencies. With the market up 5 of the last 6 weeks, the trend remains positive. 

 

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