newest Gemini AI model, rallied 6.3% and was one of the strongest forces lifting the S&P 500. Nvidia rose 2.1%.
Monday’s gains followed sharp swings in recent weeks, not just day to day but also hour to hour, caused by uncertainty about what the Fed will do with interest rates and whether too much money is pouring into AI and creating a bubble. All the worries are creating the biggest test for investors since an April sell-off, when President Donald Trump shocked the world with his “Liberation Day” tariffs.
Despite all the recent fear, the S&P 500 remains within 2.7% of its record set last month.
Several tests for the market lie ahead this week. One of the biggest will arrive Tuesday when the U.S. government will deliver data on inflation at the wholesale level in September.
Economists expect it to show a 2.6% rise in prices from a year earlier, the same as in August. A higher-than-expected reading could deter the Fed from cutting its main interest rate in December for a third time this year, because lower rates can worsen inflation. Some Fed officials have already argued against a December cut in part because inflation has stubbornly remained above their 2% target.
Traders are nevertheless betting on a nearly 85% probability that the Fed will cut rates next month, up from 71% on Friday and from less than a coin flip’s chance seen a week ago, according to data from CME Group.
In other dealings early Tuesday, U.S. benchmark crude oil lost 25 cents to $58.59 per barrel. Brent crude, the international standard, shed 30 cents to $62.42 per barrel.
The dollar fell to 156.70 Japanese yen from 156.91 yen. The euro slipped to $1.1517 from $1.1521.
Bitcoin fell 1.1% to $88,100. It was near $125,000 last month
