Dogwifhat (WIF) Rallied Higher While Tracing a Familiar Pattern – What Could Come Next?

As both a shareholder of CoreWeave and its sole GPU supplier, Nvidia now faces a dilemma after the sharp decline in CoreWeave's stock price. If it intervenes, each rescue strengthens expectations of a safety net, raises the threshold for future rescues, and risks getting further entangled in this high-leverage game. If it does not intervene, CoreWeave's liquidity crisis will directly cut off demand for GPU purchases, simultaneously devaluing Nvidia's equity investment and severely damaging its market reputation.

After the CPI was released, the market-implied rate hike probability first rose to 50% before falling back to 40%. Wall Street generally believes that whether action will be taken in October still depends on how the Federal Reserve assesses inflation trends. "The New Fed News Agency" noted that, unlike in August when price increases were concentrated in certain items, the stronger-than-expected performance of September's core CPI was more broad-based, further reinforcing the case for a December rate hike. The speech by Waller on Friday morning Beijing time is his last public statement before the Fed's blackout period ahead of this month's meeting. Economists are warning about an "inflation spiral," with real purchasing power and midterm election pressures interweaving.

The S&P 500 Index fell by 1.1%, ending a streak of 53 consecutive trading days without a drop of 1% or more. This was the longest period of calm since January 2020.

The latest Beige Book released by the Federal Reserve on Wednesday shows that overall economic activity in the United States continues to grow, but performance varies across regions. Consumer spending remains generally weak, and there has been little change in the labor market.