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Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!
This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.
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Market Talk
Markets are higher to start the week as the Fed cuts interest rates by 25 basis points.
3 Stories Moving the Market
These are some of the biggest stories so far this week that are having an influence on market action.
Fed Cuts Rates, Signals More Easing Ahead
The Federal Reserve voted 11–1 to cut its benchmark rate by a quarter point, bringing the federal funds range to 4.00%–4.25%. The Fed’s dot plot now projects two more cuts this year as policymakers respond to a slowing labor market and rising unemployment. Chair Jerome Powell framed the move as a “risk management cut,” while newly appointed Governor Stephen Miran dissented in favor of a deeper reduction.
🔑 Key Points
Quarter-point cut approved: Fed lowered the funds rate to 4.00%–4.25%, its first cut since July 2024.
Two more cuts projected: Dot plot showed a slim majority favoring additional reductions at October and December meetings.
Labor market concerns: Powell warned job growth has slowed and unemployment has risen to 4.3%, the highest since 2021.
Political overhang: Miran, a recent Trump appointee, dissented in favor of a deeper cut, underscoring the political pressure now shaping Fed dynamics.
2026 divergence: The Fed projects just one cut next year, far fewer than the two to three currently priced by markets.
👀 What You Need to Know
The Fed has signaled an easing cycle is underway, projecting two more cuts this year despite inflation that remains above target. That stance highlights how quickly labor market risks have moved to the forefront of policy. Markets are already pressing the Fed’s forward curve, betting on more easing than officials admit. Political pressure from Trump’s camp further complicates the picture. For investors, the signal is lower rates ahead, but under conditions of rising uncertainty.
🔐 Edge Takeaway: Powell admitted that “from a policy standpoint it’s challenging to know what to do” while…upgrade to Edge+ to read the full Edge Takeaway.
📚 Edge-ucation: What is the Fed’s Dot Plot?
The Federal Reserve’s dot plot is published four times a year and shows where each policymaker expects interest rates to be at the end of each year and in the longer run. It’s one of the most closely watched parts of the Fed’s projections because it reveals how officials see the balance between inflation and growth playing out. While not a formal commitment, it heavily influences how traders and economists reset their expectations.
Individual forecasts: Each dot corresponds to a single FOMC member’s rate projection, giving a distribution of views rather than a single target.
Median as signal: The median dot is treated as the market’s benchmark, often moving yields more than speeches or press conferences.
Immediate market impact: A shift higher in the dots can lift Treasury yields and pressure equities, while a dovish move tends to support risk assets.
Limits of reliability: The dots change sharply when inflation, jobs, or growth data diverge, so they should be seen as conditional probabilities, not promises.
For investors, the dot plot matters because it shapes rate expectations that drive asset pricing, but it is best understood as a window into the Fed’s mindset rather than a fixed roadmap of future policy.
China Bans Nvidia’s AI Chips, Pressuring Its China Strategy
Nvidia $NVDA ( ▲ 0.28% ) shares slid after China’s internet regulator ordered Alibaba, ByteDance, and other major tech firms to stop buying its custom RTX Pro 6000D chips. The move follows Beijing’s earlier push to avoid Nvidia’s H20 semiconductors and escalates pressure on the company’s Chinese business, though Nvidia has already removed China from its forecasts. CEO Jensen Huang said he remains “patient,” but acknowledged political tensions are limiting access to the market.
🔑 Key Points
New Ban: China’s regulator ordered Alibaba, ByteDance, and others to stop buying Nvidia’s RTX Pro 6000D chips.
Previous Curbs: Beijing already discouraged Nvidia’s H20 chips and accused the company of antitrust violations this week.
Local Substitutes: Regulators say domestic firms like Huawei and Baidu now match Nvidia’s China-grade chips.
Global Focus: Nvidia pivots toward U.S./U.K. AI infrastructure deals as geopolitical risk squeezes Chinese demand.
Market Reaction: Nvidia stock fell -2.8% to $170, AMD and Broadcom also traded lower.
👀 What You Need to Know
This ban highlights how Nvidia’s growth narrative depends increasingly on markets outside China, given Beijing’s drive for self-sufficiency in AI hardware. While Nvidia can absorb the loss of Chinese sales in the near term, domestic competitors like Huawei are gaining political tailwinds, raising longer-term risks. The company’s global strategy now leans on U.S. and European infrastructure partnerships, but its China setback underscores the vulnerability of AI leaders to geopolitics.
🔐 Edge Takeaway: Nvidia pulled in $46.7B revenue last quarter, up 56% YoY, with Data Center at $41.1B. China used to be worth $17–18B a year in revenue, but now…upgrade to Edge+ to read the full Edge Takeaway, including the Edge score and CMG Strength Ratio.
Elon Musk Buys $1B in Tesla Stock, Sending Shares Higher
Tesla $TSLA ( ▲ 4.02% ) shares jumped this week after Elon Musk disclosed his first open-market purchase of the stock since February 2020. Musk bought 2.57 million shares Friday for about $1 billion, his largest purchase ever by value, and traders saw it as a rare vote of confidence. Tesla is trading around $418, up more than 5% on the news.
🔑 Key Points
Historic buy: Musk acquired 2.57M shares for ~$1B, his largest purchase ever, dwarfing his prior $10M buy in 2020.
Stock move: Shares rose 6% this week, trimming YTD losses but still off all-time highs despite a 30% three-month surge.
Ownership stake: Musk owned ~13% before the purchase, underscoring his deep commitment even as Tesla pursues a shift toward AI and robotics.
Pay package: Shareholders will vote in November on a compensation plan tied to ambitious milestones, potentially worth up to $975B.
Wall Street split: Analysts’ consensus target implies ~20% downside, though bulls argue autonomy and AI could reset the valuation curve.
👀 What You Need to Know
Musk’s rare insider buy gives investors a psychological anchor at a time when Tesla faces softening EV demand, political brand risks, and reduced incentives under the Trump administration. The size of the purchase signals conviction ahead of November’s pivotal shareholder vote on his mega-pay package and xAI tie-in. While the market reaction was swift, the longer-term question is whether Tesla can pivot from a carmaker narrative into an AI-driven robotics platform.
🔐 Edge Takeaway: Musk’s $1B insider buy is a manufactured headline, not a…upgrade to Edge+ to read the full Edge Alert.
In Other News
In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.
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The Second Half
The rest of the week is quiet from a reports perspective, allowing markets to digest the Fed interest rate decision.
Earnings Reports
There’s only one stock we cover reporting this week, FedEx, which reports on Thursday after the bell:
Here is the full calendar of earnings releases scheduled for the rest of the week:
Source: Earnings Whisper
Economic Reports
With the Fed decision in the rear view, the rest of the week is relatively quiet on the economic news front, but we do get initial jobless claims and Philly manufacturing data.
Here is the full calendar of events scheduled for the remainder of the week:
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Thank you for reading this edition of the Mid-Week Wrap-Up.
Until next time investors!
Mark & Chris
The Investor’s Edge
Disclosure
This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
