A weakening jobs market changes things... A Fed governor is 'inclined' to hold rates steady... Three reasons behind Nvidia's blockbuster growth forecast... The post-injection era of weight-loss drugs has begun...
That didn't take long...
In yesterday's Digest, we described how fresh economic data from Uncle Sam and private payroll firm ADP was pointing to a weakening labor market. And we discussed what that might mean for market expectations toward Federal Reserve policy...
The markets had been expecting a rate hike later this month, but we wrote yesterday that it might not happen...
If we see continued weakness in the labor market, coupled with high(er) inflation, it may change the Fed's priorities again – or at least complicate them.
A weak labor market means the Fed may not raise rates this month like the market has been expecting. So inflation could continue to run hot moving ahead.
That's our human take (take that, AI agents!), and it hasn't been priced into the market yet. Federal-funds futures traders only marginally decreased their bets today on a hike at the Fed's September 15-16 meeting, from 67% to 60%.
Sure enough, a day later, those odds are now down to about 50/50. That's a meaningful drop since yesterday morning.
Ahead of tomorrow's key "nonfarm payrolls" jobs report for August – which may show more job-market weakness – fed-funds futures traders are adjusting their thinking. The jobs data so far this week is one reason. I (Corey McLaughlin) will note another... Kevin Warsh replaced Jerome Powell as Fed chair because President Donald Trump wanted lower interest rates.
So Warsh's Fed will only raise rates if it has to. And a slowing labor market would be a reason to leave rates alone... a different position than the chair faced when he spoke at Jackson Hole, Wyoming last week.
If that's the case, Warsh has at least some support on the Fed's voting board...
In an interview with Reuters today, Fed Governor Chris Waller said he would be "inclined to support" keeping the federal-funds rate steady this month.
Waller said he sees signs of "disinflation" in recent data, and said the Fed should be patient...
I'm going to paraphrase John Lennon here: Give disinflation a chance. We can wait one meeting. What's the cost of waiting one meeting? Hiking 25 basis points at one meeting right now is not going to bring the [consumer price index] down to 2%.
Others might disagree. Three members of the Fed's policy board voted for a rate hike at the central bank's previous meeting in July. Oil futures are at six-week highs as I write. Brent crude's November contract is near $96 per barrel after a fresh Iranian missile attack on Kuwait. Higher oil prices can drive inflation across the economy, and some folks at the Fed might still see this as a bigger problem than labor-market weakness.
But Waller is right about one thing. At this rate, nothing – other than a sharp recession – will likely bring inflation down to 2% anytime soon. After all, it has been above that level for 65 straight months, starting in March 2021.
Whatever happens, we're willing to bet on this: more inflation. Same old, same old when it comes to central bankers: "Prices go up, since that's better than the alternative."
But that can be good for your portfolio...
Thanks to falling expectations for a September rate hike, the benchmark S&P 500 Index was up 1% today, while Treasury yields were slightly lower across the board.
Interest-rate-sensitive sectors like real estate and financials rose more than 1%, while less rate-sensitive sectors like healthcare, energy, and materials were flat or slightly lower. That's a reversal of trends we saw heading into last week's speech by Warsh in Jackson Hole... as DailyWealth Trader editor Chris Igou wrote about this week in his newest monthly "sector checkup."
The latest Institute for Supply Management monthly report on the U.S. services sector also pushed stocks higher. The report beat Wall Street expectations while showing gains in orders, employment, and prices, although employment is still in the index's "contraction" territory.
Three important things about Nvidia...
We've covered the AI bellwether's earnings report in recent Digest issues. Nvidia (NVDA) surprised the market by projecting 70% year-over-year revenue growth for its 2028 fiscal year.
Now, Select Value Opportunities editor Mike Barrett has taken a deep dive into Nvidia's earnings... And he explored the three underlying reasons that Nvidia's executives made this public prediction...
- Amazon (AMZN) is extending its 16-year partnership with Nvidia...
- Nvidia's non-hyperscale data-center revenue growth is accelerating...
- Adoption of agentic-AI technology is increasing compute capacity.
The latter two suggest the AI boom is going strong. But I want to highlight the first observation because it speaks to long-term demand for Nvidia's products.
The Amazon partnership is interesting and meaningful for two reasons. First, it involves huge scale. Second, Mike identified another detail: Amazon Web Services ("AWS"), the world's leading cloud operator, is basically an AI vehicle now. As Mike wrote...
During its second-quarter call on July 30, [Amazon] CEO Andy Jassy made a tantalizing observation... AWS is growing so fast and has become so big that its $169 billion in annualized revenue would rank it No. 24 in the Fortune 500 (the 500 largest U.S. companies by total revenue) if it were a standalone company.
Jassy also said that more enterprise customers are choosing AWS for their AI needs because their other data and applications are already embedded in AWS...
Jassy believes that customers are also choosing AWS over other options, such as Google Cloud, due to its superior operational performance. To remain a premier destination for AI workloads, you need the best technology. And that's exactly what Nvidia provides...
Five months ago, Amazon announced plans to add more than 1 million of Nvidia's graphics processing units ("GPUs") to AWS starting this year. Eight days ago, the company doubled that projection for 2027 and 2028. Amazon's going to be a big Nvidia customer for years.
Mike's subscribers and Stansberry Alliance members can read his latest issue for more details, including his latest buy-up-to price recommendation for Nvidia shares.
Another stock worth buying...
Last but not least for today, we want to point you to the newest issue of our Prosperity Investor newsletter. Last night's issue was penned by Dave Lashmet... Stansberry Research's Hall-of-Fame expert on emerging technologies.
As many of you may know, Dave has been well ahead of the obesity-epidemic story. For years, he has been identifying the companies that are working to address the crisis, are well-positioned to profit, and present the best investment opportunities.
In Prosperity Investor, he updates folks again...
As he explains, somewhere in a lab, a group of chemists has found a way to make a weight-loss drug without needles or the slow biological brewing process (much like beer) that the current blockbusters require.
Because of how it's made, this drug can be manufactured far more cheaply and at greater scale than injectable drugs that have already become popular.
But right now, this product is barely a line item on the company's income statement.
That's going to change fast, though. Dave's expectation is that this drug could generate on the order of $100 billion a year within about a decade – and that it could become the world's most valuable drug as soon as 2030.
Dave has had this company on his watch list for a year. He's moved it to buy – with a specific buy-up-to price for subscribers, so you know exactly where he'd get in. Existing Prosperity Investor subscribers and Alliance members can find the details here.
New 52-week highs (as of 9/2/26): CF Industries (CF), Chevron (CVX), Dorchester Minerals (DMLP), Exelixis (EXEL), Cambria Emerging Shareholder Yield Fund (EYLD), Helmerich & Payne (HP), IQVIA (IQV), Johnson & Johnson (JNJ), Marathon Petroleum (MPC), Match Group (MTCH), Pfizer (PFE), Ternium (TX), Valero Energy (VLO), and State Street Energy Select Sector SPDR Fund (XLE).
In today's mailbag, feedback on yesterday's Digest, in which we mentioned a weakening jobs market... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"In yesterday's Digest, you wrote:
But one number really stands out: Hiring, or lack thereof, in "professional and business services" – a category that covers staffing agencies, consulting firms, and computer-systems design. This category saw hiring decline by 188,000 jobs in July, which could be an important signal. Temporary staffing and consultant work are some of the first to go when various companies start bracing for a slowdown.
"I agree that this is no doubt part of the reason, but here's another suggestion as to why that number is growing. These of 'professional and business services' – things like website design, answering emails for someone, sorting their calendar, building spreadsheets, basic design work (designing a business card/letterhead/leaflet, whatever), basic legal work, basic bookkeeping/accounting, IT services and basic software programming, administrative support, etc. etc., are ALL quickly becoming irrelevant services! Companies simply don't need to hire for these types of roles anymore, because AI's like Claude, etc. are now able to do the exact same work at a fraction of the cost, and a fraction of the required workforce. It's just another indication of the insidious effects of AI, which are slowly starting to make their way through the system." – Subscriber Julia R.
All the best,
Corey McLaughlin
Baltimore, Maryland
September 3, 2026
