Morning Market Pulse: Trump’s Economic Push and Nvidia’s Earnings Test AI Sector

The pre-market session is off to a rocky start as major U.S. equity futures trade lower, with the S&P 500 (-0.55%), Dow (-0.73%), and Nasdaq (-0.66%) all pointing to a weak open. The selloff reflects a mix of macroeconomic jitters—ranging from Trump’s inflation-focused agenda to Bitcoin’s 30% drop—and a sector-specific tug-of-war between AI optimism and valuation concerns.

Commodity markets add to the unease: WTI crude edges up 0.03% to $59.88, while gold, silver, and copper all fall sharply, with silver (-1.59%) and gold (-1.03%) leading the retreat. This signals a risk-off shift, with investors pricing in tighter monetary policy and geopolitical uncertainty. Let’s break down today’s key stories.

1. Trump’s Inflation Play: Can Tax Cuts and Tariff Adjustments Win Back Voters?

President Trump is doubling down on his economic messaging, touting tax cuts and healthcare cost reductions as solutions to inflation. With midterms having exposed Democratic gains on affordability concerns, his focus on lowering drug prices and revising tariffs is critical. The market will watch if these promises translate into policy action or remain rhetorical. For now, the selloff in gold and copper suggests investors are skeptical about near-term inflation relief.

2. Nvidia’s Q3 Earnings: The AI Sector’s Make-or-Break Moment

Nvidia (NVDA) reports earnings tomorrow, with $1.25 EPS and $54.8B revenue expected. The stock’s 13% drop after a $100M private placement (see below) highlights valuation fragility. A beat could validate AI’s long-term potential, but a miss risks a sector-wide correction. Analysts are split: bullish on demand for data center chips but wary of overvaluation. This is a must-watch for AI investors.

3. Bitcoin’s 30% Drop: Rate Cut Fears and Macro Sensitivity

Bitcoin (BTC-USD) fell below $90K for the first time in seven months, driven by delayed Fed rate cut expectations and renewed inflation worries. The drop mirrors April’s pullback after Trump’s tariff plans, underscoring crypto’s sensitivity to central bank policy. With crypto funds seeing outflows, this volatility could spill into equities, especially tech names tied to speculative flows.

4. Trump’s Tokenized Maldives Resort: Crypto Meets Luxury Real Estate

The Trump Organization’s $1B Maldives resort, tokenized via blockchain, is a bold play to attract crypto investors. Partnering with Saudi developer Dar Global, the project aims to tokenize 80 villas. While this aligns with Trump’s crypto-friendly policies, the broader market may view it as a niche play. Still, it signals growing institutional interest in tokenized assets—a trend to monitor.

5. Fed’s Waller Calls for December Rate Cut: Labor Market in Focus

Federal Reserve Governor Christopher Waller, a potential Powell successor, argued for a 25-bp rate cut in December, citing a "stall speed" labor market. With key employment data delayed due to the government shutdown, his comments add pressure on the Fed to act preemptively. A cut would support consumer spending but could reignite inflation fears, creating a tug-of-war for markets.

6. Xiaomi’s AI and EV Push: Asia’s Tech Giant Gains Momentum

Xiaomi (XIAOMI) reported Q3 revenue of 113.12B yuan, with AI and EV initiatives contributing 700M yuan in profit. The company’s average smartphone price rose to 1,063 yuan, signaling premiumization. Analysts remain bullish on its expansion into AIoT and EVs, though low dividend payouts may limit retail appeal. This positions Xiaomi as a key player in Asia’s tech race.

7. Navitas Semiconductor’s $100M Raise: AI Ambitions vs. Short-Term Pain

Navitas Semiconductor (NVTS) raised $100M in a private placement but saw its stock drop 13% due to dilution. The company is pivoting to AI and EV semiconductors, leveraging GaN and SiC technologies. While a partnership with NVIDIA validates its tech, weak Q3 results and a $19.2M loss raise execution risks. Investors must weigh long-term AI growth against near-term dilution pressures.

8. Amazon’s $15B Bond Sale: Fueling AI’s Capital-Intensive Boom

Amazon (AMZN) announced a $15B bond offering to fund AI infrastructure, its first in three years. The oversubscribed deal reflects investor confidence in AI’s growth potential. With $125B in AI spending planned for 2025, Amazon is positioning itself as a key player in the data center arms race. However, the bond’s proceeds will also go to debt repayment and buybacks, balancing growth with fiscal discipline.

Ticker Watchlist

• NVDA: Earnings report tomorrow will test AI sector fundamentals. A beat could stabilize the stock; a miss risks a broader selloff.
• AMZN: Bond proceeds and AI spending plans are key catalysts. Watch for buyback announcements.
• XIAOMI: AI and EV growth is bullish, but low dividend yields may cap retail enthusiasm.
• NVTS: Short-term dilution pain vs. long-term AI/AV semiconductor potential. Monitor Q4 guidance.

Analyst Summary

Today’s market tone is cautiously optimistic about AI’s long-term potential but risk-averse in the short term. Analysts highlight the tension between Nvidia’s earnings and valuation concerns, Bitcoin’s macro sensitivity, and the Fed’s December rate cut debate. While AI infrastructure spending (Amazon, Microsoft) is seen as a growth driver, investors remain wary of overvaluation and inflation risks. The key question: Can Trump’s inflation agenda and Fed easing offset near-term volatility?

Upcoming Economic Highlights

• December 18: Fed’s policy meeting—Waller’s call for a rate cut will be closely watched.
• December 20: Nonfarm Payrolls—delayed data could reshape rate cut expectations.
• December 22: Nvidia (NVDA) Q3 earnings—AI sector’s barometer.
• December 25: Global markets closed for Christmas. Investors should prepare for a quiet week ahead, with the Fed and AI earnings as focal points.