When the markets need a hero, Nvidia CEO Jensen Huang appears in his trademark leather jacket. But even stellar results from the chip maker might not be enough to provide a lasting boost amid economic data disruption and rifts at the Federal Reserve.

Nvidia couldn't have done much more. It delivered a beat-and-raise quarter, plus it hinted that previous guidance of $500 billion in revenue from its Blackwell and Rubin chips might be just a starting point. It also specifically pushed back against fears -- promoted by famed short seller Michael Burry -- that the usable life of its hardware might be overstated.

That should soothe short-term concerns about an artificial-intelligence bubble. But ultimately it's not Nvidia that is the worry but its customers such as ChatGPT-developer OpenAI, and companies involved in financing data-center investment such as private-credit fund manager Blue Owl. Global capital expenditure on AI is expected to reach $571 billion in 2026, up from $423 billion this year, according to UBS. There's no peak in sight -- annual AI capex could be $1.3 trillion in 2030, the Swiss bank says.

However, a key factor underpinning confidence that this won't end up like the dot-com bust has been the Fed's rate-cutting path. Now doubts are growing about that trajectory after minutes from the central bank's October meeting showed at least a vocal contingent of policymakers -- and potentially a slim majority -- favored a pause in December.

Those concerns intensified after it was confirmed there won't be an October jobs report and the November report wouldn't be released until after the next Fed monetary-policy decision. The chance of a December interest-rate cut is now priced at around 30% according to the CME FedWatch tool.

Nvidia's Huang has saved the day for the AI trade, but fears are likely to creep back into the market if investors continue to lose confidence in the prospect of Fed cuts.

-- Adam Clark

*** What's Ahead for Markets in 2026? From "Liberation Day" tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us on Dec. 11 at noon for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026 -- and how to position your portfolio for success. Sign up here.

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***

Nvidia Beats Expectations. The AI Boom Is Just Getting Started.

Nvidia's CEO Jensen Huang has a message for all the people who have doubts about the artificial intelligence boom: It's just beginning. Sales of its Blackwell AI chips are "off the charts," he said, reporting better than expected results and raising the fourth-quarter outlook. If anything, AI computing demand is rising.

   -- Huang said the system being built around AI is expanding as industries 
      find more ways to use the technology. He calls it a virtuous cycle of AI, 
      and said that "AI is going everywhere, doing everything, all at once." 
      Tech stocks jumped after hours, suggesting the AI trade could bounce 
      back. 
 
   -- The chip maker reported adjusted earnings of $1.30 a share and third 
      quarter revenue of $57 billion. Data center revenue for the quarter of 
      $51.2 billion rose 66% over last year. The outlook was solid. For the 
      current quarter, Nvidia provided a revenue forecast range with a midpoint 
      of $65 billion. 
 
   -- During the company's earnings call, CFO Colette Kress said the 
      fourth-quarter guidance doesn't assume any revenue from China. Nvidia has 
      been negatively affected by geopolitical issues between the U.S. and 
      China. Recently, China has been discouraging its local companies from 
      buying Nvidia chips. 
 
   -- Third-quarter data center revenue was driven by three platform shifts, 
      according to Kress: Accelerated computing, powerful AI models, and 
      agentic applications. Nvidia's newly announced $100 billion strategic 
      partnership with ChatGPT maker OpenAI has not been finalized. 

What's Next: In a quarterly regulatory filing, Nvidia said there is no assurance that it will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments, or that any investment will be completed on expected terms.

-- Tae Kim

***

Fed Leans Toward December Pause on Further Rate Cuts

Federal Reserve officials are divided over whether to continue cutting interest rates or hold them steady through the end of the year, as reflected in the minutes of their meeting last month. While officials agreed that weakening labor-market data justified October's cut, they couldn't agree on what comes next.

   -- Policymakers spent much of their meeting debating how to weigh persistent 
      inflation against mounting signs of labor-market strain. Many said that, 
      under their forecasts, it would likely be appropriate to keep rates 
      unchanged for the rest of the year. Not everyone at the meetings votes. 
 
   -- Several others argued that another rate cut in December could well be 
      appropriate if the economy evolved as expected. All participants stressed 
      that policy was "not on a preset course" and would depend on incoming 
      data, the economic outlook, and the balance of risks. 
 
   -- The divide reflects two competing concerns: slowing job growth and income 
      expectations on one side, and inflation that remains well above the Fed's 
      2% goal on the other. Policymakers noted that consumer prices are still 
      elevated and have held above target for nearly five years. 
 
   -- Several warned that lowering rates too aggressively could send the wrong 
      signal about the Fed's commitment to restoring price stability. The 
      minutes also highlighted a growing unease about frothy markets, with 
      several officials flagging the risk of a "disorderly fall" in equity 
      prices. 

What's Next: With the Labor Department delaying the November payroll report until Dec. 16 because of the government shutdown, policymakers will head into their final meeting of the year with only a partial picture of the economy. That may encourage them to keep rates steady.

-- Nicole Goodkind

***

Sports Streaming Competition Heats Up With New MLB Deals

New three-year agreements between Major League Baseball and Netflix, ESPN, and NBCUniversal demonstrate the continued importance of live sports to entertainment companies. Sports are a way for streaming companies to retain viewers, who still want to follow their favorite teams even as they cut traditional cable.

   -- Streaming giant Netflix will open the MLB season with a single game on 
      Opening Night. The streamer will also host the T-Mobile Home Run Derby 
      and special event games that will include the 2026 MLB at Field of Dreams 
      Game and the World Baseball Classic in Japan. 
 
   -- Walt Disney-owned ESPN will get a national 30-game package throughout the 
      season available exclusively on ESPN's networks and its app. ESPN is also 
      getting the right to sell and distribute MLB.TV, making it possible for 
      fans to purchase and watch games outside of their home territories. 
 
   -- Comcast's NBCUniversal got the rights to Sunday Night Baseball, Sunday 
      Leadoff, and all four Wild Card Series of the postseason. Netflix was 
      already streaming some NFL Christmas games, and NBC's Peacock hosts 
      Sunday Night Football games. 
 
   -- Another streaming platform, Amazon.com, carries Thursday Football night 
      games. Disney also has its new ESPN streaming app, and Fox has the FOX 
      One streaming platform that hosts sporting events. 

What's Next: Separately, today is the deadline for first-round nonbinding bids for Warner Bros. Discovery, The Wall Street Journal has reported. The winning bigger could walk away with the rights to beloved characters including Harry Potter, Superman, and Tony Soprano, with some giving an edge to Paramount Skydance.

-- Angela Palumbo and George Glover

***

Target's Incoming CEO Faces Challenges Amid Choppy Demand

Target's incoming CEO Michael Fiddelke has his work cut out for him amid choppy consumer demand trends as he attempts to turn the struggling retailer around. Fourth-quarter sales will decline by a low-single digit percentage, Target said. Shoppers are worried about inflation and a weakening labor market.

   -- Target reported better-than-expected adjusted earnings of $1.78 a share 
      and sales of $25.3 billion, down 1.5% from a year ago. Comparable-store 
      sales fell, too, sliding 2.7% from a year ago, more than expected. 
      Fiddelke said they weren't satisfied with the current results. 
 
   -- Target lowered its earnings guidance for the fiscal year to account for 
      the third quarter's volatility. Fiscal-year adjusted earnings will range 
      from $7 to $8 a share, compared with its prior projection of $7 to $9. 
      Fiddelke, the company's former chief operating officer, will take over 
      from current CEO Brian Cornell in February. 
 
   -- But Fiddelke is already putting his stamp on the retailer. Target laid 
      off nearly 2,000 corporate employees in a bid to make the company more 
      efficient, unveiled a new AI-powered gift finder to help customers with 
      holiday shopping, and announced it would be cutting prices on 3,000 daily 
      essentials. 
 
   -- The new CEO unveiled more of his vision for the company, saying he is 
      focused on three priorities: Solidify Target's merchandising authority, 
      elevate the guest experience in stores and online, and accelerate the use 
      of technology across the business. 

What's Next: Target will increase fiscal 2026 capital expenditures by 25% to $5 billion to improve the store experience and merchandising strategy. Target expects to remodel more stores in 2026, and it is also evolving its shipping strategy to make sure that e-commerce doesn't weigh on the in-store experience.

-- Sabrina Escobar

***

-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Callum Keown

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November 20, 2025 07:11 ET (12:11 GMT)

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