The record-breaking rally in U.S. stocks took a pause Monday as investors waited for Big Tech earnings and tomorrow’s Federal Reserve rate decision.
Microsoft, Apple, Meta, Amazon, and Alphabet — all now accounting for nearly 30% of the S&P 500 — will decide the mood for the rest of the quarter.
Gold slipped further below $4,000 an ounce, oil softened, and traders crossed their fingers.
That said, today, October 28, has historically been the best day of the year for stocks since 1950. So…
“There’s no fear,” A strategist at JPMorgan told Bloomberg, “it’s all about how much more liquidity the Fed and Treasury can pump.”
That about sums up today’s market psychology: if the money spigots are open, then it’s time to buy. Fundamentals be damned.
Round-Tripping — The AI Bubble’s Inner Loop
One of the telltale signs of the current AI boom is an old trick from the dot-com playbook — money chasing itself. Goldman Sachs analyst James Schneider calls it “equity-funded vendor financing.”
Here, the game, expressed breathlessly:
NVIDIA invests $100 billion in OpenAI, which spends $300 billion on Oracle’s cloud. Oracle then spends $40 billion on Nvidia chips to run OpenAI’s data centers. Nvidia holds a stake in CoreWeave, which supports OpenAI’s infrastructure.
Schneider writes: “Nvidia’s investments flow out as funding,” Schneider writes, “returns are realized via GPU sales, therefore inflating the reported growth.”
It’s a loop where everyone books growth, but few create it.
AMD’s deal with OpenAI is another echo from 1999. OpenAI agreed to buy six gigawatts’ worth of AMD chips — products that don’t yet exist — in exchange for warrants on 160 million AMD shares, about 10% of the company. AMD stock jumped 24% overnight.
And then there’s Oracle’s $300 billion OpenAI contract — five times OpenAI’s annual revenue. Oracle’s stock soared 43% in a day, making Larry Ellison $100 billion richer.
When paper promises lift markets faster than products can ship, we’re not measuring an increase in productivity; we’re clocking the velocity of money.
Concentration and Fragility
Maybe it’s fitting then that a study from the University of Arizona is making its way around the financial press today. Researchers found that 3.44% of listed U.S. companies have generated all net wealth in the stock market since 1926.
Ninety-seven percent have added nothing. The top 0.26% created half of all shareholder wealth.
That’s why the coming week of megacap earnings matters so much. When a few stocks carry the market, every wobble looks like an earthquake.
A high concentration of capital is one of the main features of a stock market bubble.
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Powering the Illusion — Google Goes Nuclear
“The next scarcity isn’t chips — it’s electrons,” one Financial Times analyst observed this morning.
For investors, that means the winners in this phase won’t just be in silicon — they’ll be in uranium, grid tech, and power infrastructure.
Bloomberg reports that NextEra Energy will restart a long-mothballed nuclear plant in Iowa to power Google’s data centers. The 615-megawatt facility, shuttered since 2020, will be online by 2029.
As the circling financing at the high end of AI developers works it through the system, the demand for data center buildout in the U.S. is skyrocketing (Source: Financial Times)
NextEra shares jumped on the news because it signals a turning point: the world doesn’t have enough energy to keep feeding AI’s exponential demand.
The U.S. already has 5,426 data centers — more than the rest of the major economies combined — and $40 billion more under construction, up 400% since 2022.
The Fed’s Quiet Revolution
At last week’s Payments Innovation Conference, Fed Governor Christopher Waller declared that DeFi and fintech are no longer “viewed with suspicion or scorn.”
He called this “a new era for the Federal Reserve in payments.”
Already priced in. The Fed will likely cut another quarter point – into nearly 4% inflation. By classical economics standards, that’s insane – and inflationary. By Trump and Bessent’s standard, it’s necessary to deal with the U.S. growing debt interest payments. (Source: YCharts)
Tomorrow’s rate cut announcement by the Fed will happen while the quants behind the scenes are busy trying to figure out how streamlined payment systems will speed up liquidity for non-banks — an experiment in giving fintechs direct access to the Fed’s system.
Innovation, not austerity, is becoming the U.S. dollar’s defense mechanism.
For those watching Dollar 2.0 from the sidelines, this is how central banks reinvent credibility in the digital age: not by tightening money, but by partnering with the innovators who keep it moving.
More to come as these regulations come online and dampen concerns the stablecoins are anything but stable.
Japan’s Printing Press with a Website
In Tokyo, the Nikkei broke through 50,000 for the first time ever just as Trump praised new Prime Minister Sanae Takaichi for her defense plans. It should have been a victory lap — but the numbers tell another story.
Debt has hit 230% of GDP. The Bank of Japan owns 51% of government bonds. The yen has collapsed to 152.98 per dollar. The central bank is no longer a stabilizer; it’s the market itself.
“The Bank of Japan isn’t managing risk anymore — it is the risk,” The Economist wrote. Bitcoin, now at $114,500, is the mirror image of that policy. As the Nikkei rises on printed money, Bitcoin follows — a 0.45 correlation this year, the highest on record.
This is not an anomaly. It’s the future. Every government trapped in debt is learning the same playbook: print, debase, pray, repeat.
The Grand Bargain — Dealmaking in Asia
While traders obsess over AI multiples, the real deals are happening in Asia. U.S. and Chinese negotiators struck tentative accords on tariffs, shipping, and export controls. Treasury Secretary Scott Bessent told NBC he expects “a productive meeting” between Trump and Xi Jinping in South Korea later this week.
At the same time, the U.S. and Japan signed a pact on critical minerals to reduce reliance on China. “Strategic competition hasn’t replaced interdependence — it has institutionalized it,” The Financial Times wrote.
Bill Gates added his own forecast: “The race for next-gen nuclear reactors is the new space race.”
Deal-making is going global. Under the Trump grand realignment strategy, political and corporate alliances are being rewired around energy, AI, and trade security.
The Next Generation’s Squeeze
And yet…
A Wall Street Journal poll shows 80% of Americans don’t believe their children will be better off financially. Only 11% think their kids will be able to afford a home. Housing prices have surged 50% since the pandemic, wages lag inflation, and job security feels fragile.
These are the tensions pushing Zohran Momdani’s popularity with younger voters in the New York City mayoral race.
They are also the quiet truth behind market euphoria: asset inflation disguises generational decline. Innovation, trade, and even monetary governance now feed on the same illusion — that endless capital can outrun consequence.
When that illusion fades, we’ll see what’s left of real value. Let’s just hope it fades instead of blowing up in our faces.
~Addison
P.S. This week on Grey Swan Live!, we’re turning to Trump’s new economic nationalism and what it means for U.S. military readiness in the conflicts to come. Our guest is John Robb — strategist, author, and former consultant to the Joint Chiefs of Staff — who brings deep insight into how autonomous weapons and AI are reshaping global power.
With markets rallying on the latest signs of a U.S.–China trade deal, John will highlight the next geopolitical flashpoints — and the emerging investment opportunities as technology rewires the defense industry from the inside out.
Join us live this Thursday by becoming an annual member of the Grey Swan Investment Fraternity [click here].
