If this stock market were a house, it would look great from the outside but its dimensions would raise architectural concerns.

The S&P 500 hit fresh records to start the week, helped by Nvidia's latest blockbuster deal with OpenAI. Behind the scenes, performance is more mixed.

Fewer than one in 10 stocks are at 12-month highs. And while the S&P 500 with its outsize tech weighting has jumped 13.8% this year, the equal-weighted version of the index is up only 7.7%.

It's a familiar story and repeat of 2023 and 2024, when tech heavyweights pushed the market higher against a backdrop of rocky Federal Reserve policy.

That's not necessarily a problem, unless a shock to the tech sector causes it to unwind. Valuations also look stretched. But Nvidia and Co.'s stardom mostly masks wider weakness.

The labor market is in the doldrums and home sales have at points this year been the slowest since 2009. Add in continued signs of inflation and it's easy to see why the Fed's job is so hard right now.

As the Minneapolis Fed's Neal Kashkari said last week, it looks like some parts of the market don't need interest-rate cuts, while others need them badly.

Outside tech, investors are rightly concerned about the Fed's pathway on rates. Last week's quarter-point cut was welcome, but expectations for borrowing costs to fall further keep shifting amid inflation worries.

A mass of Fed speakers on Monday reiterated inflation concerns and a speech from Fed Chair Jerome Powell on Tuesday is likely to do the same. Inflation data due Friday will be critical.

Just as a house needs strong foundations to stay standing, the stock market needs rate cuts -- or the rally could come crashing down.

-- Jack Denton

***

Nvidia Strikes Another Deal, Investing $100 Billion in OpenAI

Nvidia and OpenAI are working together to advance artificial intelligence, unveiling plans for a massive buildout of data centers. The agreement is a bet that AI models continue to improve and drive continued and accelerated investment toward a future that is increasingly thirsty for computing power.

   -- Nvidia plans to invest up to $100 billion in OpenAI. The partnership will 
      deploy at least 10 gigawatts of Nvidia AI systems to train and run 
      OpenAI's next-generation AI models. The first phase is planned to come 
      online during the second half of 2026. 
 
   -- The arrangement will be using Nvidia's upcoming Vera Rubin advanced AI 
      platform. Nvidia's investment in OpenAI will be done as each gigawatt is 
      deployed. OpenAI said Nvidia will be the "preferred" compute and 
      networking partner for its AI factory growth plans. 
 
   -- OpenAI CEO Sam Altman told CNBC that only Nvidia had the capability to 
      enable an AI infrastructure buildout at this type of enormous scale and 
      speed. Nvidia CEO Jensen Huang said it's the next leap forward for the 
      two companies, which have pushed each other for the past decade. 
 
   -- Broadcom earlier announced a $10 billion order for AI chips from a new 
      customer, reported to be OpenAI by The Wall Street Journal. Some analysts 
      have wondered if Broadcom would attain a much larger share of OpenAI's 
      future AI chip orders but the Nvidia deal may lower those chances. 

What's Next: Nvidia is also investing $5 billion into chip rival Intel, where it will design custom processing chips that can be integrated into its own chips and data center equipment and personal computers. And it's making $2.5 billion of investments in AI projects in the U.K.

-- Tae Kim and Liz Moyer

***

Miran Believes Fed Rate Is Way Too High, Explains Dissent

Federal Reserve governor Stephen Miran broke from his colleagues at last week's policy meeting because he believes the central bank has set interest rates about two percentage points too high, taking into account structural shifts in the economy. He won't accept consensus decisions he doesn't believe in.

   -- Miran, the lone dissenter at last week's meeting, told the Economic Club 
      of New York the appropriate benchmark rate should be in the low- to 
      mid-2% range, well below the current level of 4%-4.25%. He warned that 
      current policy risks unnecessary layoffs and higher unemployment. 
 
   -- Changes in immigration, tariffs, tax law, and regulation have pushed down 
      the economy's neutral rate of interest, the level at which Fed policy is 
      neither stimulating nor slowing growth, he said, adding that officials 
      are underestimating how restrictive policy currently is because the Fed 
      hasn't fully accounted for those shifts. 
 
   -- During a question-and-answer session, Miran shared plans to keep pressing 
      his case for steeper rate cuts, even if he remains in the minority. "I'm 
      not going to vote for something I don't believe in, just for the sake of 
      creating an illusion of consensus where there is none." 
 
   -- Miran's comments contrast with Atlanta Fed President Raphael Bostic, who 
      told The Wall Street Journal that inflation concerns make him hesitant 
      about declaring his support for another rate cut in October. He has only 
      projected one rate cut for all of 2025. 

What's Next: Fed Chair Jerome Powell speaks on the U.S. economy during an event today hosted by the Greater Providence Chamber of Commerce. He's scheduled to deliver prepared remarks at 12:35 p.m. Eastern time during a luncheon, with a Q&A to follow.

-- Nicole Goodkind

***

Disney Restores Jimmy Kimmel's Show to ABC After Controversy

In a fairly quick about-face, Walt Disney announced it would restore comedian Jimmy Kimmel's late night show to ABC starting this evening after suspending it last week under pressure from the Trump administration and affiliate owners Sinclair and Nexstar over comments Kimmel made regarding Charlie Kirk.

   -- Disney, announcing the come back on Monday, said it suspended the show to 
      avoid further inflaming a tense situation but has decided to return the 
      show after several days of discussion with Kimmel. But Sinclair and 
      Nexstar, which together own dozens of ABC affiliates, could still decide 
      to pre-empt the show. 
 
   -- Nexstar owns or operates around 30 local ABC stations, while Sinclair 
      runs 38. For Disney, the decision shaped up after a meeting between 
      Kimmel and top executives at the entertainment company, The Wall Street 
      Journal reported, which added there's no comment on whether Kimmel will 
      publicly address the matter. 
 
   -- Disney faced pushback for suspending Kimmel after Federal Communications 
      Commission Chair Brendan Carr threatened to step in if Disney-owned ABC 
      didn't take action. And President Trump suggested the administration 
      could revoke broadcast licenses of television networks that are critical 
      of him. 
 
   -- The FCC, Nexstar, and Sinclair didn't reply to Barron's requests for 
      comment. Hundreds of actors and other celebrities are signatories of a 
      letter sponsored by the American Civil Liberties Union calling Kimmel's 
      suspension a "dark moment" for freedom of speech. 

What's Next: Anna Gomez, the sole Democrat FCC commissioner, said in a statement that she was "glad to see" Disney find courage in the face of "clear government intimidation." She said the FCC, which clears mergers of media companies, must combat efforts to stifle free expression.

-- Anita Hamilton and Liz Moyer

***

Trump Links Autism to Tylenol Use During Pregnancy

President Donald Trump's health policies are taking shape, and they include a warning about the use of Tylenol during pregnancy, which he has linked with autism in children, and a separate warning about the child vaccine schedule. Tylenol maker Kenvue said there isn't a causal link between the drug and autism.

   -- Acetaminophen, Tylenol's active ingredient, is one of the few pain and 
      fever medications recommended for pregnant women. But Trump, flanked by 
      Health Secretary Robert F. Kennedy Jr., Medicare Administrator Mehmet Oz, 
      and others, warned them not to take it. 
 
   -- Kenvue told Barron's that it was "deeply concerned" with the risks this 
      poses for expecting mothers. And Dr. Steven J. Fleischman, president of 
      the American College of Obstetricians and Gynecologists, said it wasn't 
      backed by the full body of scientific evidence and dangerously simplifies 
      causes of neurologic challenges in children. 
 
   -- Kenvue, spun out of Johnson & Johnson in 2023, has faced numerous 
      lawsuits claiming that prenatal exposure to Tylenol was associated with 
      increased risk of autism and attention deficit hyperactivity disorder in 
      children. A federal judge twice ruled in Kenvue's favor in combined 
      lawsuits, citing issues with the plaintiffs' methodologies. 
 
   -- Navann Ty, lead analyst for U.S. healthcare at BNP Paribas, told Barron's 
      that "Proving the causation will be very difficult, because the 
      plaintiffs have already tried" in previous lawsuits. She doesn't expect 
      Monday's announcement to reopen previous litigation or to affect Tylenol 
      sales. 

What's Next: Trump's warning about the childhood vaccine schedule focused on the number of vaccines given at a time, suggesting parents spread them out instead. More study into whether vaccines cause autism -- scientists have pointed to several studies showing no link -- is coming, Kennedy said.

-- Nate Wolf and Janet H. Cho

***

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

September 23, 2025 06:47 ET (10:47 GMT)

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