The Fed's Quiet Pivot and Nvidia's Loud Warning

The latest from the Fed's top ranks... The central bank opened the door to a cut... Was that a bell ringing at the AI top?... When investors sell good news, something is happening... The 'event vs. process' moment... A prescient pick...

The Fed sent out the big 'dove'...

For about two weeks, the market had been increasingly pessimistic about the Federal Reserve lowering interest rates at its December meeting.

But the script has flipped.

New York Fed President John Williams is considered the central bank's No. 2 or No. 3 behind Fed Chair Jerome Powell. At times, he even serves as the chair's de facto spokesperson. On Friday, Williams made a speech in Chile suggesting the Fed could indeed lower rates again next month.

I (Corey McLaughlin) have been sharing all these twists and turns because the market cares so deeply about interest rates. As regular readers know well, a lower federal-funds rate can stimulate the economy by making it cheaper for businesses to borrow money... at the risk of higher inflation.

In his remarks in Chile, Williams said he fully supported the previous two Federal Open Market Committee decisions to cut the fed-funds rate range by 25 basis points. And now, he said, he's more concerned about a weakening labor market than about inflation (which higher rates can curb).

In the next breath, Williams sounded like he was reading words written by Powell's speechwriter...

I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.

We don't know for sure the intent of Williams' message. But Wall Street recognized the "dovish" tone and guidance as having Powell's blessing.

We've seen this dynamic play out with Williams' speeches from time to time, but if you're not a devoted Fed watcher, it's easy to miss such a quiet pivot.

Fed-funds futures traders have roughly doubled their odds of a rate cut early next month to around 80% since this time last week. And the major U.S. stock indexes' recent slide from all-time highs has stopped... for now.

For a second straight trading day, stocks were higher. Today, the benchmark S&P 500 Index gained 1.6%, the small-cap Russell 2000 Index was up almost 2%, and the tech-heavy Nasdaq Composite Index closed 2.7% higher.

Looking at the signals...

The CBOE Volatility Index has jumped to around 20, which is elevated but not extreme. High-yield credit spreads are higher than they've been most of the past several months but also remain relatively low.

And some indicators point to a potential bottom of the recent "correction," as Ten Stock Trader editor Greg Diamond termed it today. Greg wrote in more detail to subscribers in his Weekly Market Outlook today.

Still, I keep turning back to what my colleague Nick Koziol covered last week... That's AI bellwether Nvidia (NVDA) posting another blockbuster quarter, only for its shares to fall roughly 8% intraday on Thursday.

That could be a telling signal about the market overall, as Market Maven editor Gabe Marshank shares today...

How to listen to Mr. Market...

In more than 20 years working at hedge funds, I (Gabe Marshank) had the great fortune to learn at the feet of some of the best money managers in the world. But no lessons were more valuable than what I learned in my eight years working with the man I consider the greatest trader of all: Steve Cohen.

While at SAC Capital (now Point72 Asset Management), I absorbed market wisdom that is, today, telling me we are at a huge and important inflection point for markets.

Two of Steve's phrases come to mind. I'm going to introduce them in turn and see how they pertain to today's market...

Market bottoms are an event, but market tops are a process.

When the market bottoms, it's due to a single event that we can usually name. For example, the Lehman Brothers bankruptcy during the global financial crisis, or the COVID-19 pandemic lockdowns.

But when markets top out, it is a longer, drawn-out process.

A market top needs to suck all the available capital into the dominant narrative at the time. That could be Japanese industrial supremacy in the 1980s, or the limitless prosperity of the Internet in 2000. It has to go through the process of getting everyone to believe in the bull case and everything that the bull case touches.

That's what has happened with artificial intelligence. The tech giants that are operating AI, like Alphabet (GOOGL) and Microsoft (MSFT), have rallied to all-time highs. So has the company that's the biggest beneficiary of their spending – Nvidia, now the largest stock in the market. And so have all the "bank shot" plays, like power and utility companies.

At this point, is anyone still left to buy into the AI story? That brings us to the second quote...

It's not the news... It's the reaction to the news.

This is pure trader wisdom. It means the market can tell you what is already priced in by looking at how stocks react to news.

So let's look again at Nvidia, which is the stock that summarizes the AI trade more than any other...

Two weeks ago, the stock hit an all-time high, exceeding $5 trillion in market value. (For us old hands, it has an eerie similarity to when the Nasdaq peaked out in March 2000 – also at the nice round number of around 5,000.)

Since then:

• The Trump administration agreed to dial down its tariff war with China...

• The U.S. government shutdown ended...

• And Nvidia reported results and guidance that exceeded analyst expectations.

All these things are good news for Nvidia. And yet, the stock is down 12% from its recent peak.

And the reaction to the earnings announcement itself was the most telling. Again, the company handily beat estimates and gave guidance ahead of Wall Street expectations. The stock initially climbed 5%... then reversed intraday to close 3% lower.

It's a sign that folks who own the stock are using good news as an opportunity to exit. This is a giant bell ringing not just for Nvidia but for the market as a whole.

AI isn't just a tech phenomenon – it's a meaningful part of the entire country's GDP growth. It is the biggest driver of prosperity on Main Street...

But on Wall Street, Mr. Market is now telling us it's all priced in.

Take heed of these lessons and proceed with extreme caution.

Lastly today, a shoutout to our Stansberry's Investment Advisory team...

I (Corey) will close today's Digest with great news for subscribers who followed the Investment Advisory team's advice on Semrush (SEMR).

Semrush is just an obscure software business... that is, unless you followed their recommendation just about four months ago.

Last week, shares of Semrush surged nearly 75% on news that Adobe (ADBE) is acquiring the business in an all-cash deal that valued it at $1.9 billion.

Stansberry Research senior analyst Alan Gula writes more about the deal, why it happened, and how it confirms the idea behind the Investment Advisory recommendation in a piece for our Stock Market Trends website here.

You see, Semrush is a leader in search engine optimization ("SEO") tools. But as Alan explains, "this acquisition isn't just about SEO... it's Adobe securing the 'discovery layer' in a world where AI increasingly answers questions before users ever reach a website."

The deal highlights precisely the view that Alan and the Investment Advisory team had on Semrush months ago... that it would be a beneficiary of AI, not a casualty.

The title of subscribers' August 1 issue was "Buy This Keyword King Before the Market Discovers Its AI Secret." That's what just subscribers got a chance to do. Those who followed the team's advice are sitting on a roughly 31% gain in the position in just a few months.

New 52-week highs (as of 11/21/25): Alpha Architect 1-3 Month Box Fund (BOXX), Cencora (COR), Quest Diagnostics (DGX), Expeditors International of Washington (EXPD), Alphabet (GOOGL), Grail (GRAL), iShares Biotechnology Fund (IBB), IQVIA (IQV), Medtronic (MDT), Roche (RHHBY), Travelers (TRV), UGI (UGI), and Health Care Select Sector SPDR Fund (XLV).

In today's mailbag, feedback on Dan Ferris' latest Friday essay... and more thoughts on the U.S. government's $1 billion loan to Constellation Energy to reopen a nuclear power plant in Pennsylvania... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"I think that the White House is only the world's second richest hedge fund. Number one is really [Chinese President] Xi's 'White House,' at least in terms of money already spent. We are now in a periodic table 'arms race' with China, that until Trump started all this new tariffing business in the last 9 months, was only occasionally simmering before. Remember, China does not really believe in a free market economy. China believes that they should be running the world along with Russia..." – Subscriber Peter S.

"It makes more sense for a huge project like this to draw its power from one huge source. Reactivating the nuclear plant is a perfect solution in my opinion. If these AI projects pull their power needs from our regular consumer grids, they will drive up electric rates for all of us, outbidding our personal and business needs. You and I can't compete with Nvidia on pricing!

"There is precedent for this. Disney World has its own utilities – power, water, waste management – rather than competing with the citizens of Kissimmee, FL. When they built the Mall of Georgia in Buford close to where I lived at the time, they built a water and sewer system for it so it wasn't pulling water off the grid for the town of Buford.

"You can fuss about the loan and all of us paying for it, but every major city has done the same thing when they built a big ol' sports stadium to lure in a major league ball team. Loans, gifts, tax breaks, whatever the powers that be can come up with to outbid another town, they toss it in the hopper. And who pays for that? Not just the ticket buyers.

"So, I think this was a decent decision. Maybe I would like to see some kind of payback provision, such as in ten years' time they begin paying back $500 million/year, but politicians aren't finance gurus (obviously!)." – Subscriber Jacqueline G.

All the best,

Corey McLaughlin with Gabe Marshank
Baltimore, Maryland and Berkeley, California
November 24, 2025